5 Heavily Short-Sold Stocks That Won't Squeeze
Since the beginning of the year, the big story on Wall Street often hasn't been the pandemic. Rather, the buzz has been about the retail movement and the desire to seek out the next short squeeze.
In simple terms, short-sellers are investors betting on a lower share price. Since a company's share price can't go below $0, gains are capped at 100% for pessimists. Conversely, given that there's no theoretical ceiling as to how high a stock's share price can fly, losses for short-sellers are unlimited. A short squeeze is a very short-term event that involves short-sellers rushing for the exit at once. To exit their position they'll need to buy shares, which only further exacerbates the potential runaway upside in a publicly traded company.
The thing about investing for a short squeeze is that it's usually a poor strategy with few winners. Stocks with high short interest are often struggling businesses and rightly worth avoiding. Although the following five heavily short-sold stocks are all potentially on the short-squeeze radar for retail investors, I wouldn't expect a squeeze out of any of them.
Source Fool.com
