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A short squeeze also happens when you have forced buyers (desperate to close their short VIX futures position) with a limited supply of sellers. Which is exactl
by cm2187 5y ago
A short squeeze also happens when you have forced buyers (desperate to close their short VIX futures position) with a limited supply of sellers. Which is exactly what happened that day. It’s not the VIX index itself that caused the XIV to be wiped out.
- rank0 5y agoThey would just have to pay the premium that short sellers were demanding. I see your point, but calling it a short squeeze seems odd to me. "Volpocalypse" was indeed an unprecedented spike in IV, which the futures market was reacting to. Seems pretty different to me than the classic short squeeze scenarios of GME or Volkswagen.