Bad news on a camping trip. And for certain Wall Street traders.
You're probably familiar with the terms "bulls" and "bears" for stock trading purposes. Just in case you're not: bulls are betting that the market (or a particular stock) will go up...bears are betting that the market (or a particular stock) will go down.
A squeeze is a situation where one of those groups gets in a bad spot. A bear squeeze happens when conditions turn against the bears, usually forcing them to throw in the towel and give up their positions.
The connotation can imply that someone is purposely trying to force the bears to surrender. A central bank might be trying to drive up the price of its currency, so it takes steps to squeeze the bears and force them to cover their positions, helping to boost the price.
A bear squeeze will usually force a stock (or currency, or whatever) even higher.
So...a bunch of traders think that Grizzly Inc. is headed into the toilet. They short the stock, betting that it will go down. But a few days later, a famous hedge fund manager says something nice about Grizzly on a finance TV show. The stock rises. It keeps rising to the point where the bears decide to cut their losses. When they cover their shorts (get squeezed out), they buy stock to close out their positions. This buying becomes fuel for another push higher for Grizzly's share price.
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Finance: What's the Difference Between B...159 Views
Finance a la shmoop what's the difference between bear and bull? bear
pessimistic bad growly things coming Negative Nancy boo bear...Bull [Bear walking into water]
awesomesauce life's good you take it by the you know horns alright we're gonna
apply bear and bull to markets here but they apply to a whole lot of things and
a bear market is actually technical nomenclature that refers to sustained or [Bear market definition on 100 dollar bill]
prolonged periods of time where stock prices generally just fall...three
four five six seven eight quarters where the market craps the bed down down down
the bear market pattern is different from just a correction when the market
takes just a short term dump and then well you know quickly recovers yeah like [Bear market graph]
it has a bad quarter or two and then starts climbing again well that's not
the big bad bear that's just a correction a bull market is just the
opposite it goes up up up like this guy in his balloon-powered house and that's [House with balloons travels up a stock value graph]
it both are dangerous in the wild but on Wall Street huh you just have to watch
out for the Bears [Bear chasing a woman]
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