3 Short Squeeze Candidates Trading Under $10

Low float stocks can be some of the most volatile stocks in the market. If you mix in a short squeeze, the potential short-term gains in a low float stock can be extreme.

A stock's float is the number of shares that trade freely on the public market. Because insiders and institutional investors don’t typically trade their shares on a daily basis, those shares don’t typically contribute to a stock's near-term liquidity.

Float is the number of shares that remain after accounting for insider and institutional ownership.

Why Is It Important? When a stock gains positive momentum in the market, momentum buyers can rush in all at once. If a stock has a high short interest, short covering can quickly ramp up demand for shares, triggering a short squeeze. Since low float stocks have relatively few shares trading freely, a major imbalance in supply and demand can serve as rocket fuel for the share price.

Buying a low float stock with high short interest isn’t a guarantee of a short squeeze. There still typically needs to be some form of catalyst to get the stock moving in the first place. However, traders can keep an eye on these stocks for any signs of life to try to catch most of a potential big move.

Related Link: 3 Small Cap Stocks That Are Short Squeeze Candidates

Short Squeeze Candidates: Here are three stocks trading under $10 per share that have all the ingredients for a short squeeze.

Alset Ehome International Inc AEI
Alset EHome engages in land development, technology and biohealth. The stock is also the perfect short squeeze candidate within the sector.

Alset’s 770,000-share float is minuscule, creating plenty of opportunity for extreme volatility if trading volume rises. Alset also has 32.6% of its float held short.

The stock has previously demonstrated its potential for extreme volatility. In less than two weeks back in February, Alset’s stock price rocketed from around $6 to as high as $29.49. Finally, short squeeze traders have frequently targeted stocks trading under $5 per share this year, and Alset’s shares currently trade at just $4.44

Sequential Brands Group Inc SQBG
Sequential Brands promotes, markets and licenses consumer brands, including Martha Stewart, Jessica Simpson and AND1.

Sequential Brands has reported net losses in each of the past five years, but as many s-called meme stock traders have realized in 2021, short squeezes are technical market phenomena and don’t necessarily have anything to do with the company’s underlying business fundamentals or the stock’s long-term outlook.

Sequential Brands has a tiny float of just 810,000 shares, a short percent of float of 26.6%, and a stock price of just $9.44, making it a prime short squeeze target.

RA Medical Systems Inc RMED
RA Medical Systems designs and sells excimer lasers used to treat dermatologic and cardiovascular diseases.

RA Medical has a tiny float of 2.68 million shares and a 39.7% short percent of float, highest of the three stocks mentioned. The stock also has a history of extreme volatility. On a single day in early May, the stock traded as low as $3.50 and as high as $6.37 before closing back below $4.