Sometimes when a downtrodden stock jumps, it is due to a “short squeeze” rather than some massive change in the fortunes of the company. So what is a short squeeze and why does it matter?
Short sellers sell borrowed stock, hoping to buy the shares back at a cheaper price and lock in a profit. It is considered a particularly risky strategy because while the price of a stock can’t fall more than 100%, it can go up indefinitely, causing potentially infinite losses.
No comments:
Post a Comment