Short Squeeze

Fancy Way to Say: 'Fake' Buying There are two types of purchases in the investment world: purchase to go long; purchase to cover a short. Initiating a long is considered 'real' buying in that a position of ownership is being initiated. This position is meant to participate in the appreciation of the security. However, there are also those which are short a given security. And from time to time an event will happen which leads shorts to want to cover, sometimes at any price. This leads to furious, get out at any cost, buying. When this happens seemingly incredible rallies appear, taking out offers with a vengeance. But, it's not looked at as 'real' buying as once the shorts are done covering who will be left to continue buying? The bids will disappear and the security will generally return to more natural levels.

» Stock Exchange Jargon