The Second Squeeze

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The second squeeze can hurt you more than the first squeeze. This

occurs when your broker needs to return to the lender the stock

you borrowed. This can happen if the original lender needs to sell.

The lender can be the brokerage firm, or, if it doesn't have the stock,

the firm can borrow it from a client's account. The broker may not

have additional shares to loan, in which case your stock will be

returned. This is another reason to sell short stock intraday. You

don't have to worry about the second squeeze because you hold

the stock for only a short time or until the end of the day. You are

not carrying the short position overnight and exposing yourself to

market risk. If you do plan to carry a short position overnight, make

absolutely sure that the stock is available for you to cover the position

and place an exit stop.

The second squeeze can hurt you more than the first squeeze. This

occurs when your broker needs to return to the lender the stock

you borrowed. This can happen if the original lender needs to sell.

The lender can be the brokerage firm, or, if it doesn't have the stock,

the firm can borrow it from a client's account. The broker may not

have additional shares to loan, in which case your stock will be

returned. This is another reason to sell short stock intraday. You

don't have to worry about the second squeeze because you hold

the stock for only a short time or until the end of the day. You are

not carrying the short position overnight and exposing yourself to

market risk. If you do plan to carry a short position overnight, make

absolutely sure that the stock is available for you to cover the position

and place an exit stop.