Short squeezes are powering up some of this year's biggest gainers
Short squeezes have generated some massive returns recently, as the meme craze makes a comeback. Our Senior Quantitative Analyst Rocky White compiled a bi-weekly list of stocks most ripe for a short squeeze. The table features the equity's total available float tied up in short interest, how much short interest has increased over the last month, and how underwater these bearish bettors are.
This screen finds stocks where the shorts might be at a big loss and therefore likely to begin covering. Obviously, there are quite a few assumptions, so these would be very rough estimates.
To estimate the return for the shorts, White went over the past year of short interest reports to find when the shorts were added. He then used the average price over the prior two weeks and estimated the amount of shorts that were added at that average price. Below are stocks with significant shorts added, which could be at a big loss.
You'll notice some old friends there, like earth exploration stock Rocket Lab (RKLB), U.S. based rare earth miner MP Materials (MP), and quantum computing firebrand IonQ (IONQ).
The table is sorted by shorts at a loss. The highlighted portion shows stocks with 10% or more of their total available float sold short, indicating these names could see significant unwinding.