Book 60%-Plus Profits On This Short Squeeze Play

The Dow and S&P 500 are headed back toward all-time high territory, but the big hedge funds out there are still selling stocks short – and getting crushed.

And believe it or not, the short-sellers are actually becoming more, not less, active as we approach the summer.

I guess they'll never learn…

In the hands of millions of regular investors and day traders, the short squeeze is nothing less than the market's hottest trade right now. Stocks like Blackberry Ltd. (NYSE: BB), AMC Entertainment Holdings Inc. (NYSE: AMC), and GameStop Corp. (NYSE: GME) are taking off like fireworks on the 4th of July.

Now, those trades, clearly, have already paid off; getting into a stock like AMC or GameStop right now would be risking a lot for table scraps.

But because hedge funds will be hedge funds, I'm always looking out for a good short-squeeze stock, and I'm here to let you know I've found the perfect one.

It's perfect because the market hasn't figured this one out yet – and the hedge funds haven't figured out we're on to 'em…

gray metal tower with accessories

Image Source: Unsplash

The Short Squeeze "Scene" Is Heating Up

The short squeeze trade was relatively quiet throughout April before heating up in May. 

As the hedge funds are finding out (again), shorting a stock can be a dicey undertaking. And when I say "shorting," I don't mean trading puts, although those can pay off when a stock sinks. Instead, what shorting means here is "borrowing" the shares on margin, hoping they go down, and then selling them back and pocketing the difference.

Theoretically, anyone could short a stock, but in practice, hedge funds and institutions are the biggest practitioners because they have deep pockets. Anytime you short a stock, you're betting that the stock will decline and using margin accounts to do it – which means that you're leveraged.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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