Short Squeeze

A short squeeze happens when a stock price rises sharply, forcing investors who bet the price would fall (called "shorting") to buy shares quickly to limit their losses. This rush to buy pushes the price up even more, creating a self-reinforcing cycle. You'll hear about short squeezes during volatile market moments, especially with heavily shorted stocks—they can create wild price swings that catch many traders off guard. For example, if lots of investors shorted TechCorp stock expecting it to drop, but good news sent the price soaring instead, those short-sellers would scramble to buy back shares, driving the price higher still. It's a reminder that betting against a stock carries real risks.