Squeezing The Shorts

According to Karen Finerman, two stocks might pop as the result of an imminent short-squeeze.

Before we reveal which two, remember when traders short a stock, they borrow it and sell it into the market with the promise of buying it back and returning it.

Short squeezes can occur when a lot of traders cover their positions or buy stock back – the volume of buying can send shares much higher.

Squeezing the Shorts
Squeezing the Shorts   

That's confusing so here's another way of saying it; a short-squeeze is a rapid rise in stock price resulting from the rush to cover short positions.

Karen Finerman reveals that Green Mountain Coffee Roasters shot higher on Thursday, likely due to a short squeeze. It soared 37% in one day.

And going forward she thinks you could see a similar type of squeeze in DineEquity and Citigroup due to the outstanding short interest in these stocks.

But keep in mind, it's a calculated bet and an extremely volatile trade.

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Trader disclosure: On Apr 30th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (LVS), (AAPL), (WFC), (SDS); Seymour Owns ( AAPL), (BAC), (EEM), (FXI); Seymour Is Short (X); Finerman's Firm Owns (AXP), (PBR), (RIG), (UNH), (TBT); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (C) Preferred; Finerman's Firm Owns(MSFT) & (MSFT) Put Spread; Finermans Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Najarian Owns (BX) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MS) & (MS) Calls; Najaria Owns (NTRS); Najarian Owns (ORCL) Call Spread; Najarian Owns (PALM) & (PALM) Calls; Najarian Owns (RHT) Calls ; Najarian Owns (UNH) Puts; Najarian Owns (VAR) Call Spread; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread