New metric empowers market participants to proactively monitor short squeeze risk by leveraging combined insights from market behavior, securities finance activity and social sentiment.
EquiLend, the global leader in data and technology for the securities finance industry, has announced the launch of its Short Squeeze Score – a unique trading signal designed to provide an early warning of potential short squeezes. The signal enables traders, portfolio managers and risk teams to proactively mitigate risk in their portfolios by identifying the likelihood that a given security may be vulnerable to a short squeeze.
A short squeeze occurs when a heavily shorted security experiences a rapid price increase, forcing short sellers to cover positions and accelerating upward price pressure. The Short Squeeze Score is available across more than 50,000 unique equities in EquiLend’s suite of Data & Analytics Solutions, including DataLend, Orbisa and the Orbisa app on Bloomberg.
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“With today’s market volatility and uncertainty, the ability to proactively identify the risk of a short squeeze is more valuable than ever,” said Nancy Allen, Head of Data & Analytics Solutions at EquiLend. “Built on our transaction-based securities finance data, our score brings greater transparency to the global short sale market—and we’re excited to share it.”
Three Powerful Data Pillars Behind the Score
The Short Squeeze Score provides a holistic risk signal derived from three critical dimensions:
- Market Dynamics
- Securities Finance Data
- Social Sentiment
By combining these data sets, the Short Squeeze Score not only reflects current conditions but anticipates potential emerging risks for market participants. In back-testing, the score has shown strong historical correlation with prior squeeze events, such as the January 2021 GameStop short squeeze.
“This launch underscores our dedication to providing DataLend and Orbisa customers with data-driven insights that enable them to anticipate market trends, manage risk and drive innovation in their decision process,” said Nick Delikaris, Chief Product Officer at EquiLend.
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