Anatomy of a Short Squeeze

A short squeeze is not magic. It is inventory math colliding with forced buying.

When too many shares are borrowed and sold short relative to the freely tradable float, any sustained buying pressure forces short sellers to cover. Covering is buying. Buying lifts the price. Higher prices force more covering. That feedback loop is the squeeze.

The four numbers on the alarm board

1. Short interest % of float (SI%) — how much of the freely tradable supply is already short. Above ~20% starts to matter; above ~30% with rising borrow is crowded.
2. Days to cover (DTC) — SI divided by average daily volume. High DTC means covers take days, not hours — fuel for a prolonged move.
3. Borrow fee — the annualized cost to keep a short open. Spiking fees mean locates are scarce and shorts are under pressure to exit.
4. Utilization — percent of available lendable shares that are already out on loan. 90%+ utilization with rising fees is the classic crowding signal.

SQUEEZE! folds these into one squeeze score (0–100) and maps it to alarm levels: CLEAR → WATCH → ELEVATED → CRITICAL → KLAXON.

What the score is not

It is not a buy signal. High scores flag conditions where a squeeze is mechanically more likely if flow flips. Catalysts, options gamma, and float dynamics still decide whether the loop ignites.

How to use the board

• Filter KLAXON / CRITICAL for a watchlist — not a market order list.
• Cross-check borrow fee trend (rising vs. flat), not just the level.
• Size as if the name can halt and gap against you.
• Rehearse entries, adds, and exit ladders on Stock Picks before real size.

The short version

Know the setup before the tape goes vertical. The alarm board tells you where pressure is building. Your paper account tells you whether you can survive the trade.