Identifying the Squeeze Setup
Short squeezes are often preceded by a specific combination of lending market signals. When short interest as a percentage of free float is high, and the cost-to-borrow (CTB) begins to spike, it indicates that shares are becoming scarce and expensive to maintain.
Key Metrics to Watch
- Utilization: The percentage of lendable shares currently out on loan. High utilization suggests that the supply of shares available for shorting is drying up.
- Borrow Fee: As availability drops, the cost to borrow increases, putting pressure on existing short sellers.
- Days to Cover: A measure of how many days it would take for short sellers to buy back their positions based on average daily volume. A rising ratio increases the potential for a violent price move if a squeeze is triggered.
Source
Signal data sourced from Ortex. This post is an original analysis prepared by The Forensic Ledger from publicly available data. Not investment advice.
#Lending Market Alert#Short Interest
Not investment advice. This is original reporting and analysis prepared by The Forensic Ledger from publicly available data. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.