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Dec. 3, 2021, 10:37 a.m. EST

Penny Stocks To Buy For A Short Squeeze? 5 To Watch Now

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Dec 03, 2021 (Penny Stocks via COMTEX) -- One of the hottest trends in the stock market today has penny stock traders looking for short squeezes. Thanks to extensive breakouts from the likes of AMC Entertainment, GameStop, and plenty of others, the market metrics of this trend have led to huge making money potential. One of the reasons for this is the short-term moves made by these types of stocks. But, first, what is a short squeeze, and why should it matter?

In basic terms, investors "short" a stock as a bet against it. They may feel that companies are overvalued and could drop in price. So, to take advantage of this speculative bet, they'll borrow shares from a broker, sell those shares, then repurchase them at a lower price to return their loan.

The difference in price between the original sale price and the repurchase price is a short trader's profit. Sounds great, right?

What happens in the event the stock price doesn't drop? The short trader still needs to return their loan to the broker. The price per share doesn't matter; only the shares borrowed.

This is where your short squeeze comes into play. Borrowed shares essentially get repurchased at higher prices, and as the share price continues higher, other shorts get "squeezed" out of their positions, taking a loss. Meanwhile, retail buying adds to the equation, and, in this scenario, you'd see market events like AMC exploding hundreds of percentage points in a short period.

Learn more: Penny Stocks Trading for Beginners [2021]

Short Squeeze Penny Stocks To Watch

  1. PetVivo Holdings ( NASDAQ: PETV )

  2. Petros Pharmaceuticals ( NASDAQ: PTPI )

  3. Opko Health ( NASDAQ: OPK )

  4. Ring Energy ( NYSE: REI )

  5. Beyondspring Inc. ( NASDAQ: BYSI )

PetVivo Holdings /zigman2/quotes/200270424/composite PETV +15.19%

PetVivo Holdings is no stranger to big moves in short periods. In fact, at the start of November, PETV stock went on a multi-day, 105% move to highs of over $5. One of the exciting trends to have emerged recently is in the pet industry. One of the contributing factors to a boom in "man's best friend" came during the pandemic as more people chose to bring pets into their homes during the lockdowns last year. According to data from Statista, the US pet industry alone is expected to reach nearly $110 Billion in 2021.

PetVivo specializes in medical therapeutics for animals. The company will debut new products at the American Association Equine Practitioners ("AAEP") conference next week. "We are looking forward to networking with leaders in the industry and develop relationships that will help drive forward our initial veterinary medical device, SPRYNG, for the management of lameness issues, including conditions related to osteoarthritis, in our family members and equine athletes" said John Lai, Chief Executive Officer of PetVivo Holdings, Inc.

But the real story among retail traders puts more of a spotlight on share structure and short interest right now. While Fintel data shows PETV stock has a short float percentage of less than 10%, the lower float of the penny stock lends itself to the potential for volatile spikes. We saw this last month, and the latest uptick in trading volumes could put PETV back on the list of penny stocks to watch right now.

Petros Pharmaceuticals /zigman2/quotes/222977415/composite PTPI -2.36%

Earlier this quarter, we discussed Petros Pharmaceuticals on a list of penny stocks to watch. Among the highlights, we discussed the company's positioning ahead of potential milestones to be on the lookout for. In particular, we discussed Petros' position in the men's health industry and its relationship with companies like Hims & Hers.

/zigman2/quotes/200270424/composite
US : U.S.: Nasdaq
$ 1.82
+0.24 +15.19%
Volume: 80,023
July 1, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$18.18 million
Rev. per Employee
N/A
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/zigman2/quotes/222977415/composite
US : U.S.: Nasdaq
$ 0.82
-0.02 -2.36%
Volume: 59,707
July 1, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$16.96 million
Rev. per Employee
$325,469
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