A short squeeze could spell disaster for short-sellers unless they act quickly.
A short squeeze is a situation in which a stock's price increase triggers a rush of buying activity among short-sellers.
Short sellers must buy stock to close out their short positions and cut their losses, which results in a further increase in stock prices, which compels still more short sellers to cover their position.
They can also be damaging for traders who are shorting a stock with financial derivatives like spread bets and CFDs.
This is because derivatives traded with leverage that can increase both your profits and losses.
This is especially true during a short squeeze or similar scenario where markets behave in an unexpected way.