What attracts short squeeze investors? Usually, it's a stock with a low number of outstanding shares (low float) that simultaneously holds a high level of shorted stocks (short interest).
Look out for these low float stocks with high short interest to get ahead on any short squeezes to come.
What are low float stocks?
Every publicly traded security has a specified number of available shares. When traders start buying these shares, the number of available stocks decreases. A stock's float is its outstanding shares that haven't been sold.
Low float stocks are those with a low level of outstanding or available shares.
Why is this important? Stocks with a low float tend to experience larger price swings and volatility. Most of the time, institutional and insider investors take up the float, but there might also be a restriction on some of the stock (like during the lockup period shortly after an initial public offering).
How to find low float and high short interest stocks
A stock's float level is important. However, if you're after a squeeze, you'll also want to consider short interest, which isn't calculated as part of the float. A high short interest ratio means that shares have been redistributed to be shorted at a high level.
Fortunately, you can find both of these metrics through MarketWatch, Fintel, or a similar website. Their live chart shows the most shorted stocks of the day and it also includes the float. They also tell you the percentage of the float that's shorted—a detail that combines the float and short interest.
If you want to look up a specific stock's float and short interest, you can check out its chart on any site that offers fundamentals, like Yahoo Finance.
Additionally, Finviz tells you the percentage of the stock that insiders own.
Top stocks with low floats and high short interest ratios right now
Right now, there are tons of stocks with high short interest ratios that also have low floats. Here are nine of them to get you started:
- Clene Inc. (NASDAQ:CLNN) with a float of 1.97 million, 57.04 percent of which is shorted
- Creatd Inc. (NASDAQ:CRTD) with a float of 2 million, 51.87 percent of which is shorted
- Carver Bancorp Inc. (NASDAQ:CARV) with a float of 0.96 million, 53.06 percent of which is shorted (insiders own 81.75 percent of CARV stock)
- Neuropace Inc. (NASDAQ:NPCE) with a float of 1.85 million, 34.1 percent of which is shorted (insiders own 42.5 percent of NPCE stock)
- Nabors Industries (NYSE:NBR) with a float of 6.77 million, 10.9 percent of which is shorted
- Avenue Income Credit Strategies Fund (NYSE:ACP) with a float of 245,000 shares, 53.64 percent of which is shorted
- Ascendis Pharma (NASDAQ:ASND) with a float of 91,000 shares, 53.83 percent of which is shorted
- Pubmatic Inc. (NASDAQ:PUBM) with a float of 7.1 million, 36.47 percent of which is shorted
- Alfi Inc. (NASDAQ:ALF) with a float of 4 million, 26.7 percent of which is shorted