These Two Signs Will Tell You a Short Squeeze is Over

These two signs will tell you a short squeeze is over
Keep an eye out on these two things.

How will we know when a short squeeze is over?

There’s going to be signs traders will want to keep an eye out for.

In this article, I’m going to be going over them in detail and will be using AMC and GameStop as examples.

Be sure to read to the end so you don’t miss a thing.

Let’s get started.

franknez.com

Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

Let’s dive right into it!

Join the newsletter to become part of an activist group fighting for market transparency!

Receive weekly market news to stay up to date.

#1. Short interest

short interest

The short interest of a stock shows us the percent of a company’s float that is being shorted.

The reason AMC and GameStop were able to see price surges last year is because a small percent of short sellers closed out their positions in these stocks.

AMC’s short interest dropped from 20% to 14% when it had skyrocketed to $72 per share last year.

Today, AMC’s short interest is: 22.05%

GameStop’s current short interest is: 24.99%

You will know a short squeeze is over when there is no more short interest in an underlying stock.

You cannot have a short squeeze play if there is no short interest.

For example, HYMC stock’s short interest had surged prior to AMC’s acquisition.

The stock’s price surged and days later we saw the short interest plummet, and it continues to plummet.

HYMC’s short interest today is: 2.85%

A short squeeze for HYMC seems unlikely at this low of a percentage – there are simply not enough short sellers to squeeze and create a big price runup.

SI goes up and goes down

If HYMC’s SI was to surge, then it increases the possibility to squeeze shorts at a high enough short interest percentage.

However, it’s important to look at how short interest moves.

I update AMC’s, GameStop’s, HYMC’s and many other stocks’ short interest daily here.

If HYMC’s short interest keeps going down, don’t expect a short squeeze from Hycroft any time soon.

Hypothetically speaking, if AMC or GameStop’s short interest drops by 5%, then you know there’s still ‘squeeze’ juice, leaving AMC and GME at 17% and 19%, respectively.

Keep an eye on the short interest, it’s important to identify how many shorts are still in the game as AMC and GME begin to move up again.

#2. Utilization falls

AMC’s and GameStop’s current utilization are both at 100.

The utilization is the number of all outstanding loans available for lending.

You will know a short squeeze is over when AMC’s or GameStop’s utilization falls extremely low, when there are almost no shares available to loan.

For example, Ford (F) has a utilization of 1.14.

Apple (AAPL) has a utilization of 0.06 and Tesla (TSLA) has a utilization of 3.76.

The utilization tells us how much lending is happening in a security to short it.

And as long as AMC and GameStop are being heavily shorted, both are a short squeeze play.

Keep an eye out on the utilization, updated every trading-day here.

I hope this article was easy to digest and the information was straight to the point.

Have any questions, thoughts, or opinions?

Leave a comment below.

If you found this article to be educational or you learned something new give this post a social share.

You can follow me on: Twitter | Facebook | LinkedIn

Frank Nez is on YouTube – Subscribe to the channel for more content
Related: AMC's Shares on Loan Are at An All-Time High

10 Comments

  1. Jimmy

    Indeed Kenny blamed us for Melvin going down. He is right . Well maybe he’s not . Melvin went down due to the greed. Plotkin kept doubling down so to speak on shorting amc and others. So it was plotkins own greed that caused the failure. I have done nothing more than purchased a stock and held on to said stock for a year and a half now. The one mistake I made was thinking these funds would CLOSE their positions by now. I bought in expecting a run up similar to gme. It should have happened as the timing was right . These peoples greed is insane . But then again maybe mine is too. I could have walked away last year at 72 bucks and been very content with that . My average is 7.16 , so what the hell was I thinking lol. Anyway here we are and the good news is that when we squeeze , and we will all of our gains are taxed at long term rates now. Saves a tremendous amount of money. So keep doubling down mr and mrs hedge funds , the only demise your causing is your own. Great web site by the way. Been reading for a longtime now, figured id join in on the fun. Keep up the good work!

    • Frank Nez

      Thanks for your input, Jimmy!

  2. Daryl T Olson

    Good article and comments. The selling of unlimited fake shares is still a huge issue.
    Paste link below in search to get very detailed account of how the naked short scam works and steals billions from retail investors. It describes lack of closure allows bypassing the tax man (tax fraud), also.
    It appears most of the brokerages are in on the massive fraud of selling more fake shares than real shares. Part of comment pasted below link.

    (click on top line that comes up when entering link below)
    https://www.siliconinvestor.com/readmsg.aspx?msgid=22856435

    From: rrm_bcnu
    For the Newbies: A recap
    DATELINE RESEARCH – NAKED SHORT SELLING
    “In order for this fraud to be perpetrated on unsuspecting investors, two main prerequisites exist. The first is the fact that purchasers of shares on these trading venues do not request the registration and home delivery of their shares. They see an entry on their monthly brokerage statement and have no reason to question its validity. The second prerequisite is the fact that brokerage firms do not monitor for the “good delivery” of shares purchased by their clients as mandated by “The Customer Protection Rule” or Rule 15 (c) 3-3.

    With the presence of these two prerequisites as being the “norm” on these trading venues, clever opportunists have realized that they can sell nonexistent shares through Canadian margin accounts, in an undetected fashion, and thereby assume a “naked” short position. This followed by the subsequent selling of yet more nonexistent shares tends to result in a precipitous drop in the share price, a share rollback of the victim corporation and its disastrous loss of market cap, or the outright bankruptcy of the victim corporation which circumvents the need for the naked short position to be closed, as it no longer trades. This lack of closure of the “sell then buy” circuit allows the massive proceeds of this fraud to bypass the taxman. The typical naked short selling campaign or “bear raid” results in the death of the victim company within a 6 to 9 month period. The management teams and investors are often left scratching their heads wondering what hit them.”

  3. Larry

    Can you give me your thoughts on BBIG ?

  4. Christopher

    Why Kenny?s statement in those interviews are such a big deal, and what they tell us; that were right all along, and we?re hurting the SHFs every day.I have been in AMC for a long time now when I bought my first 1000 shares. Since then, I levered up position and I bought more stock along the way . As AMC was being manipulated & shorted and kept falling in price I kept buying more stock knowing that AMC was a good investment and a good company that will make it through this pandemic and be profitable once things turn to normal. I pushed through moments of doubt, I held, and I posted mimes like of a angry don of a #$%$ And that whole time, everyone of those ?experts ?, from Talking Heads like Chuck Gasparino to Fat Jim Cramer, to the corporate media like Motley fool, Financial Times ,Yahoo Finance and CNBC; have all said that AMC will fail and that we are idiots .They printed and said we were wrong about hedge funds short positions, and that we are wrong about the viability of AMC; that the hedge funds were doing fine, and we were in hurting them at all by buying AMC stock and their HF short positions were really closed! Over a year they said that we were irrelevant, and that we were stupid, and that we were wrong. And then, just this week, the big bad evil guy himself, Ken Griffin, said that we caused Melvin to crash, I don?t even think he realized what he was saying, as he was just trying to preemptively shift the blame for what?s happening and for what?s about to come. But, by saying that the mime AMC & GME stockholders crashed Melvin, and that we did it by holding my stocks like AMC; he is only contradicted all the ?experts ?on Twitter and in the media here and advertently confirm that we were right all along. Think about it, how could holding a stock like AMC crash a hedge fund? Only if they shorted the hell out of it and we?re wrong .Unless we are right about the over leveraged short positions,unless we are right about their market manipulation, unless we are right that their short positions weren?t closed, unless we were right that we were hurting them, how else could we possibly be responsible? The only way we possibly be responsible for Melvins collapse as-if we were right all along. We are winning this battle .And they?re bleeding. And Ken Griffin of Citadel securities just said it explicitly. There is no more room for doubt, we?re winning this battle.Edit; this is not financial advice. I?m not trying to crash hedge funds, I just like the stock AMC and I want America?s favorite pastime which is going to the movies theaters , going to the theater to watch new releases on the big screen & socializing to continue in this world so we all get better!

  5. Shimmer

    Citadel Algos Exposed: Creating Arbitrage To Steal From Retail And Stop Price Discovery? Possible DDTLDR: Citadel has two algorithms. SmartProvide and FastFill. They use these two algos to facilitate latency arbitrage. Effectively knowing there will be a difference between true price and the price its trading for and take advantage of the discrepancy for personal profit. The also route non-beneficial orders to off-exchange so their algos continue to work how they want. These two algorithms scalp pennies on the dollar over and over. So I ask, how can a private company that relies on latency arbitrage for personal profit NOT have any conflicts of interest for best available price throughout the entire market? How can they say the represent retail when they steal from us every minute of the day?Those discrepancies are not just made of money out of nowhere. They are effectively STEALING our best available price so that THEY can keep it. And these slimy #$%$s govern the entire U.S. markets???We need to demand open source information to see whats behind these algorithms, currently only 15 total employees know what makes up these algorithms yet Citadel can still have full rights to market-making the vast majority of all U.S. trades on and off exchange, while also stealing from said traders.

    • Shimmer

      these are the exact reasons GG wanted to ban PFOF, latency arbitrage is not offering retail best price execution. But it is the non-transparency that it is real issue here, because of the clear conflict of interest. These are the reasons PFOF was banned in much of Europe & Canada.
      In Citadel’s case it is clearly compounded. We have Citadel the Market Market that owns Citadel Connect (the dark pool it controls) and Citadel Securities, the hedge fund that benefits. How that isn’t conflict of interest & insider information is rubbish.
      I signed Dave Lauer’s & Trey’s PFOF petition for 100,000 signatures. Treys Trades YT has the link. As someone said here we need the right eyes on this, complaining on a bd only goes so far.
      Join me & sign, it’s important. 25th is the deadline. And pass on to others

  6. Can

    What do you think about Mullen and the si from Mullen? Thx

  7. Esteban

    Useful and simple… the only “but” is one need to have ortex subs, nevertheless information is easily available almost real-time.
    Thanks for sharing Frank

  8. Frank Nez

    Let’s start a discussion! Leave your thoughts below.

© 2022 Franknez.com

Theme by Anders NorenUp ↑

%d bloggers like this: