Potential short squeeze plays have gained steam in 2021 with new retail traders looking for the next huge move. GameStop Corp. and AMC Entertainment Holdings are two high-profile examples of short squeezes earlier this year.
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
