Short squeeze or the mother of all short squeezes (MOASS) is another term which originated in probably Reddit’s most famous investing community /r/wallstreetbets.

The acronym stands for (the) Mother of All Short Squeezes and originated in parallel with the Gamestop saga.

As Gamestop’s short interest was reportedly over 100%, several retail and online investors (many of who followed Keith Gill, user /u/deepf—kingvalue) and other known investors such as Ryan Cohen and Michael Burry joined the ring.

This led to a snowball effect as $GME saw its price surge in an unprecedented manner.

Users of the online forum /r/wallstreetbets, /r/GME, /r/superstonk and other Gamestop related investment boards still believe that the MOASS has in fact not happened yet.

The anatomy of a short squeeze

A short squeeze is a somewhat rare event in which a stock price will surge unexpectedly.

For it to occur, a combination of a low available float and a significant short interest around that particular stock must be present.

As short sales expire, if a stock price rises more than expected those who had bet against it will see themselves in dire need to limit their losses, as they had previously borrowed shares on account of believing its price would sink.

Short squeezes explained

If they are right, they can later repurchase the shares they borrowed and sold, return them and pocket the difference between the price it had then and the price it has now.

If they are wrong, however, they must buy them at a higher price. As short sellers must exit their positions by purchasing the same number of shares they shorted, by simple laws of supply and demand, they forcefully raise their price.

Cutting and running, alongside natural demand, can result in unseen all-time highs.