Actual cryptocurrency prices may vary.ĭata presented may reflect assets traded on Coinbase’s exchange and select other cryptocurrency exchanges. What happened to Canoo shares highlights the danger of being on the wrong side of a squeeze.*Prices shown are for illustrative purposes only. Regardless of the math, bearish investors may want to think about S3’s list. It also considers the cost to borrow shares and daily trading volumes, among other factors. In assessing the risk of a squeeze, S3 looks at more than just the short-interest ratio. The average short-interest ratio in the 25 stocks identified by S3 Partners is about 27%, roughly four times as much as the average small-cap stock. Of small capitalization companies is about 7%. The average short-interest ratio for stocks in the Is less than 2%, but the S&P is a set of large stocks. The average short interest ratio for stocks in the That is, essentially, the amount of stock borrowed and sold short compared with all the shares available for trading. The easiest way to see if a stock might get squeezed is to check the short-interest ratio. The other automotive firms on his list of squeezable stocks are EV start-ups: “The Consumer Discretionary (primarily auto) and HealthCare (Biotech) sectors have the most constituents in the top 25 most squeezable stocks.” “The recent rally off the June 16 lows …has made some crowded shorts more squeezable,” wrote S3 managing director Ihor Dusaniwsky in a report published Monday. The news was good, but that trading action felt like a short squeeze. Shares closed up 29% the day of that announcement. military had agreed to try out some of its EVs.

A couple of days later, Canoo announced the U.S. The stock was even up more than 100% for some time on July 12, after Canoo announced a deal to sell electric delivery vans to Walmart (WMT).

A lot of bearish investors have sold short its shares, which jumped about 65% this past week. If too many investors have the same idea, and short the same stock, then any good news affecting that stock can send it soaring as bears rush to close out their positions. And shorting carries its own risks, including the risk of a squeeze. The problem is that shorting can be a tough way to make money.

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