Pot’s Short Squeeze Chance ‘Drastically’ Lower: Cannabis Weekly
- Average borrow fee fell to 11% from 30% at beginning of 2020
- Most-shorted stocks include Cronos, Canopy Growth, Tilray
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The potential for a short squeeze in the cannabis sector has been “drastically reduced” even as short interest has risen from this year’s lows, according to financial analytics firm S3 Partners.
Lower borrow fees and year-to-date profits for those who bet against the most-shorted stocks have reduced chances for a potential squeeze on the sector, Ihor Dusaniwsky, managing director of predictive analytics at S3, wrote in a report. A short squeeze happens when a stock rallies, forcing traders who bet against it to buy in order to prevent further losses, which pushes the stock even higher.