Because social-media-hype-triggered retail trading has been a trend this year, stocks possessing high short interest could attract significant attention and experience a short squeeze in the coming months. Continental Resources (NYSE:CLR), DICK'S Sporting Goods (DKS), and Macy’s (M) each possess short interest of more than 10% and have the potential to deliver exceptional returns to investors in the event of a short squeeze. Let’s discuss.While the meme stock mania appears to be waning, massive retail trading based on social-media hype may continue. Since the beginning of 2020, retail trading as a share of overall market activity has accelerated significantly. According to a Deloitte report cited by the Wall Street Journal, in January 2021 alone approximately six million Americans downloaded a trading app, and retail brokerages reported unprecedented average daily volumes for trading. The strategy in which retail investors band together on social-media forums like subreddit r/wallstreetbets led the shares of GameStop Corp . (NYSE:GME) and AMC Entertainment Holdings, Inc. (NYSE:AMC) and other meme stocks to skyrocketing rallies earlier this year.
With more rookie investors on the lookout for the next short-squeeze candidate, the market has witnessed dramatic moves in stocks with high short interest. In addition, work-from-home trends, higher personal savings levels, and access to zero-commission trading platforms should continue to drive social-media-savvy millennials to trading platforms.
Continental Resources, Inc. (CLR), DICK'S Sporting Goods, Inc. (DKS), and Macy’s, Inc. (M) each possess short interest of more than 10%. However, these shorted stocks could be highly rewarding for investors based on their short-squeeze potential.