Citi Flags Rising Short-Squeeze Risk as Investors Turn More Bullish

According to Citi, positioning among large investors in the U.S. stock market has shifted toward more optimistic bets in recent weeks, reducing outstanding short positions while raising the risk of a sudden squeeze. A short squeeze occurs when rising prices force short sellers to buy back shares quickly to limit losses, further accelerating the rally. Citi's analysts note this scenario is most likely in stocks with elevated short interest and limited free float. For retail investors, this suggests the potential for sharp, hard-to-predict price moves in certain names over the coming weeks. Experts recommend closely tracking open interest and short-position data before making trading decisions.