Calculate short-interest metrics, days to cover, position P&L and borrow-cost breakeven. User-defined covering-price scenarios are hypothetical; no squeeze risk score or price prediction is calculated.

Use short interest and volume from compatible dates.

Educational scenarios only. These inputs do not predict a squeeze or a future price. Short-sale losses can be unlimited.

Additional share and borrow data

Blank omits float/outstanding.

Blank means zero; use an annual rate, not a daily rate.

Short Squeeze (Gross Short Position P&L) Formula

The following formula is used to estimate the profit or loss on a short position. During a short squeeze (when price rises), this value is typically negative (a loss for the short seller).

PP = NS × (SP - CP)

Variables:

  • PP is gross price profit/loss (P&L), before borrowing costs, dividends, commissions and other charges
  • NS is the number of shares shorted
  • SP is the short sale (entry) price per share
  • CP is the current (or cover) price per share

To calculate the potential profit/loss on a short position, multiply the number of shares shorted by the short sale (entry) price per share. Then multiply the number of shares shorted by the current (or cover) price per share. Subtract the second result from the first. A positive result indicates a profit (price fell), and a negative result indicates a loss (price rose, as in a short squeeze).

What is a Short Squeeze?

A short squeeze is a rapid increase in the price of a stock that is often driven by market mechanics (for example, short sellers buying to cover) rather than changes in a company’s underlying fundamentals. It occurs when a stock or other asset jumps sharply higher, forcing traders who had bet that its price would fall to buy it to limit further losses. Their buying can add to the upward pressure on the stock’s price.

How to Calculate Short Squeeze P&L?

The following steps outline how to calculate the short position profit/loss using the given formula:

  1. First, determine the number of shares shorted (NS).
  2. Next, determine the short sale (entry) price per share (SP).
  3. Next, determine the current (or cover) price per share (CP).
  4. Next, insert the values into the formula: PP = NS × (SP − CP).
  5. Finally, calculate gross price profit/loss (PP). For estimated net P&L, subtract borrow fees and other charges. The calculator uses a constant average collateral price, annual rate and selected 365/360-day basis; actual broker costs may vary.

Example Problem:

Use the following variables as an example problem to test your knowledge:

Number of shares shorted (NS) = 100

Current price per share (CP) = $10

Short sale (entry) price per share (SP) = $8

PP = 100 × (8 − 10) = −$200, which is a $200 gross loss for the short seller before borrow fees and other charges.