Glossary / Market structure
Short squeeze
Also called: squeeze
A short squeeze describes a sequence in which a rising price forces holders of short positions to close them, and closing a short position requires buying — which adds to the buying pressure that is already pushing the price up. The word names the feedback mechanism, not a prediction that one will occur.
How it is measured
How is short squeeze measured?
There is no single measurement, which is worth stating plainly. Analysis of squeeze conditions combines short interest relative to float, days to cover, the cost of borrowing the shares, and the tradable supply itself. Those describe the conditions under which the mechanism could operate; whether it does depends on price action that has not happened yet.
Why it matters
Why does short squeeze matter to a swing trader?
Understanding the mechanism explains why some price moves accelerate far past what the underlying news appears to justify: closing a short is a purchase, so the mechanism is self-reinforcing while it runs. The corresponding caution is symmetry — the same conditions that allow a squeeze to run allow it to unwind just as fast once the forced buying is exhausted, and the conditions themselves are present far more often than squeezes actually occur.
In Tapeline
Does Tapeline use short squeeze?
Tapeline runs squeeze detection as its own surface, available on Pro and above. It reads short interest, days to cover and float; it is not one of the six factors in the composite score.
Tapeline publishes the six factor names and the ordering of their weights. The numeric weights, the scoring equation and the band edges are not published.
Related
See this in the product
The squeeze scanner · Full methodology
Related terms
Back to the full glossary.
General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.