Share: Yesterday we discussed how options contribute to a short squeeze, and also how they can contribute to its end. For more detail read here. Today we’ve seen sharp selloffs in the short squeeze stocks but most stocks were able to find buyers, at least temporarily. That might seem odd considering a lot of new positions are restricted. So what’s going on? There’s obviously numerous factors at play, but below we provide a few thoughts and insights for you to formulate your own opinions. Often, a short squeeze ends with a sharp sell-off, but … there are buyers in waiting, often those covering shorts, either for a profit from having sold higher, or seeing an opportunity to lock in a smaller loss from shorting below. That can provide temporary support in a stock that’s unwinding a short squeeze. In other words, if traders shorted the stock at $200, watched it go to $500, there may be willing buyers even before it gets back to $200, simply to end the pain. Then of course there are those that shorted at $500, they are buyers as well, at a profit.