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Short Squeeze Formula:
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The Short Squeeze Ratio measures the potential for a short squeeze by comparing the number of shares sold short to the total available float. A higher ratio indicates greater squeeze potential as short sellers may need to buy back shares to cover their positions.
The calculator uses the short squeeze formula:
Where:
Explanation: The ratio shows what percentage of the available float has been sold short. Higher percentages indicate increased potential for a short squeeze.
Details: Monitoring short squeeze potential helps investors identify stocks that may experience rapid price increases if short sellers are forced to cover their positions, potentially leading to significant market movements.
Tips: Enter the short interest and float values in shares. Both values must be positive numbers, with float greater than zero for accurate calculation.
Q1: What is considered a high short squeeze ratio?
A: Generally, ratios above 20% are considered high and indicate significant short squeeze potential. Ratios above 40% are extremely high.
Q2: How often is short interest data updated?
A: In the US, short interest data is reported twice monthly by exchanges, typically around the 15th and end of each month.
Q3: Does a high ratio guarantee a short squeeze will occur?
A: No, a high ratio indicates potential, but a squeeze requires a catalyst that forces short sellers to cover their positions rapidly.
Q4: Where can I find short interest data?
A: Most financial websites and brokerage platforms provide short interest data, or you can check directly with stock exchanges.
Q5: What other factors should I consider besides the ratio?
A: Also consider daily trading volume, borrowing costs, company fundamentals, and market sentiment when assessing squeeze potential.