If the chaos of GameStop and AMC this week proves anything, it’s that it pays to learn how to scan for short squeezes, before it all hits the fan.
A short squeeze can be a profitable venture to some and a sign to swiftly exit a trade to others. No matter which of those you identify with, it’s important to have the tools to scan and identify a short squeeze before it happens so you can act accordingly.
Let’s take a closer look at how to scan for short squeezes using one of my favorite tricks.
Today I’m going to walk you through how to scan for short squeeze stocks completely free.
Anyone can do this on a broker platform or website — it’s that easy. Plus this should help you the next time we have a situation like GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC) on the stock market again.
The best part of learning how to scan for short squeezes this way? It takes just a few steps to pull up this helpful information.
My favorite website to use for this is finviz.com. I have no affiliation with the website and what I love the most about it is that it doesn’t cost a single cent to use.
You see, the website has a tool that can filter through stocks based on the amount of short-selling transactions that have taken place. From there I’m able to find 88 of the most shorted stock options on Wall Street.
You can also click on the individual stocks to see a chart and the stock’s short float.
A short float compares the number of a stock’s shorted shares to the total number of available shares. A float is the amount of shares already available for investors to publicly trade.
What I like to look for in a stock’s short float is a high short float percentage. A higher percentage means, in my opinion, that there is a higher potential for a squeeze.
Don’t believe me? GameStop had a 122% short float when I checked it yesterday.
Make sure to watch my video below to learn how to scan for short squeezes and which stocks may have one in their near future. As always, leave your thoughts in the comments section below and don’t forget to subscribe to my YouTube channel to stay up to date with all things options trading.
P.S. Check out Alpha Trades Head Strategist Adam Sarhan’s short video on the real reason why brokers like Robinhood, TD Ameritrade, Charles Schwab and others are restricting or outright banning new trades on GameStop, AMC, BlackBerry, American Airlines, Bed Bath & Beyond, Nokia and others.
Did you lose money or miss out on any big wins because of the restrictions? Are you considering changing brokers now? Share your thoughts on the ongoing short squeeze mania with us at email@example.com, and we could feature your story in an upcoming piece.