1. What is Short Squeeze?

Short squeeze is a market phenomenon that occurs when a heavily shorted stock's price begins to increase, forcing short sellers to cover their positions by buying back the stock, which further drives up the price.

2. How Does the Calculator Work?

The calculator uses the Short Squeeze formula:

Where:

• \( \text{Short Interest} \) — Number of shares sold short but not yet covered
• \( \text{Float} \) — Number of shares available for trading

Explanation: The ratio indicates what percentage of the available shares have been sold short. Higher percentages indicate greater potential for a short squeeze.

3. Importance of Short Squeeze Calculation

Details: Calculating short squeeze potential helps investors identify stocks that may experience rapid price increases due to short covering, which can present both opportunities and risks in the market.

4. Using the Calculator

Tips: Enter short interest and float values in shares. Both values must be valid (short interest ≥ 0, float > 0).

5. Frequently Asked Questions (FAQ)

Q1: What is considered a high short squeeze percentage?
A: Generally, a short interest ratio above 20% is considered high and may indicate potential for a short squeeze.

Q2: How often is short interest data updated?
A: In the UK, short interest data is typically reported twice monthly, though specific reporting requirements may vary.

Q3: Does a high short squeeze guarantee a price increase?
A: No, while high short interest creates potential for a squeeze, it doesn't guarantee it will occur. Other market factors play significant roles.

Q4: Where can I find short interest data for UK stocks?
A: Short interest data for UK stocks is available through the FCA's short positions database and various financial data providers.

Q5: Are there limitations to this calculation?
A: Yes, this simple ratio doesn't account for factors like borrowing costs, option positions, or the timing of short positions.