Squeeze
When people betting a stock falls must buy it back, pushing the price up.
A short squeeze starts when a heavily shorted stock rises instead of falling. Short sellers lose money on paper, their lenders or their nerves force them to close, and closing a short means buying the stock. That buying pushes the price higher, which squeezes the next short seller, and so on.
The result is a chart that goes straight up for a few days or weeks. Those charts are real, and they are the ones you are shown. What you are not shown is the thousands of heavily shorted stocks that did not squeeze, and the months in which the squeeze reversed just as fast.
In the logbook, squeezes appear as the variance that keeps an average from ever being distinguishable from noise.
Explore the diagram (scroll horizontally on small screens)
Where this word comes up
First needed in the log entry H-059 · Testing the shorting premium: what a rebalancing bug taught us.
From the same entry: Borrow fee, Crowded shorts, Decile, Delisted, Long-short portfolio, Rebalance, Recall, Short interest percentage, Short selling, t statistic, Universe.