Goldman Sachs says this is the biggest short squeeze in 25 years, with shorted stocks up 98%

Traders on the floor of the New York Stock Exchange.
Source: New York Stock Exchange.

The most heavily-shorted stocks have rallied 98% over the last three months, making it the most extreme short squeeze of the last 25 years, according to Goldman Sachs.

In a note to clients David Kostin, Goldman Sachs' chief U.S. equity strategist, said the recent trading activity that's sent names like GameStop and AMC Entertainment soaring outstrips prior major short squeezes in 2000 and 2009.

And with retail investors entering the market in record numbers, the firm sees the trading boom continuing.