These 10 Stocks Could Be Short Squeeze Targets: Lucid, Kohl's, Avis and More

Core Viewpoint - Traders are focusing on heavily shorted stocks, either betting on a company's decline or seeking opportunities for a short squeeze [1] Group 1: Reasons for High Short Interest - Stocks are heavily shorted when investors believe they are overvalued, often due to significant risks such as poor earnings, failing business models, or industry challenges [2] Group 2: Mechanics of Short Squeeze - A short squeeze occurs when a stock's price unexpectedly rises, forcing short sellers to buy shares to cover their positions, which creates a feedback loop of increasing demand and further price spikes [3] - The volatility associated with a short squeeze can result in returns that significantly exceed typical stock movements in a short time frame [4] Group 3: Most Shorted Stocks - The article lists the top 10 most shorted stocks with market caps above $2 billion and free floats above 5 million, ranked by short interest as of February 2 [5] Group 4: Perspectives on Short Selling - Short sellers conduct detailed research to identify companies they perceive as high-risk, while retail traders often see high short interest as a potential for rapid price increases if a short squeeze occurs [6]