When the price rises, the mark-to-market loss on a short position grows and margin calls grow with it. As more participants buy back to prepare for the calls, their buying pushes the price higher and increases the losses and calls on other short positions. When few participants are willing to take the other side, even limited buying can move the price sharply.
Short squeeze
- Japanese
- ショート・スクイーズ
- Last reviewed
- October 23, 2026
A short squeeze is a price rise that feeds on itself: holders of short positions buy back to limit their losses, and that buying pushes the price up further.