How Prevalent Are Short Squeezes? Evidence From the US and Europe

Crocker Franklin Allen, Marlene Haas, Matteo Pirovano and Angel Tengulov
Additional contact information
Crocker Franklin Allen: Imperial College London
Marlene Haas: Independent
Matteo Pirovano: Universita della Svizzera italiana; Swiss Finance Institute
Angel Tengulov: University of Kansas

No 23-63, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: A short squeeze is triggered if there is pressure on short sellers to cover their positions because of a sharp price increase or a recall of borrowed shares. This drives short sellers to close their positions early. We find that stock-day short-squeeze events are rare and short-lived. However, the proportion of unique stocks experiencing a short squeeze in a given year is 25% in both the US and the EU. While we find an uptick in the number of firms experiencing a squeeze in recent years in the US, squeezes are relatively constant across time in the EU. We also review the academic literature on the topic and provide directions for future research.

Keywords: Short squeeze; stock cornering; market misconduct; disclosure and securities regulation (search for similar items in EconPapers)
JEL-codes: G12 G13 G14 G18 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4526147 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2363

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().