# Why stocks explode when short sellers panic

**URL:** <https://community.deriv.com/t/why-stocks-explode-when-short-sellers-panic/89534>\
**Category:** Our experts\
**Tags:** trading\
**Created:** [June 16, 2026, 3:34am UTC](https://community.deriv.com/t/why-stocks-explode-when-short-sellers-panic/89534 "2026-06-16T03:34:14Z")\
**Posts on this page:** 1\
**Page:** 1

<div class="post-metadata">

**Author:** ![deriv-desk](https://sea2.discourse-cdn.com/flex020/user_avatar/community.deriv.com/deriv-desk/32/8714_2.png) [@deriv-desk](https://community.deriv.com/u/deriv-desk)\
**Post date:** [June 16, 2026, 3:34am UTC](https://community.deriv.com/t/why-stocks-explode-when-short-sellers-panic/89534/1 "2026-06-16T03:34:14Z")

</div>

A stock rallies 500% in days with no news — and shorts are forced to buy at any price.

Short squeezes are chaotic events where borrowed shares must be repurchased, creating a feedback loop of buying pressure and forced liquidations.

Understand the mechanics, psychology, and real-world impact — from GameStop to the next squeeze waiting to happen.

🔗 [Understanding the short squeeze: the mechanics and the mindset](https://experts.deriv.com/insights/understanding-short-squeeze-mechanics-mindset)