Bear raiding is a manipulative tactic to bring a stock price down—and part of why short selling can be controversial

A short squeeze happens when short sellers increase stock prices by buying shares back quickly

When short sellers realize their positions may be incorrect—usually triggered by increasing share prices—they often try to quickly buy back their shares in order to minimize their total losses. When this happens on a large scale, that buying activity can drastically increase to represent the seemingly high demand for that stock. The result is called a "short squeeze," which refers to short sellers literally being squeezed out of their positions by rising prices.

Read about why bans on short selling are a controversial policy

Generally, short selling is legal, but regulations often restrict short positions when a stock has experienced a sharp price decline (more than 10% in one day). However, negative feedback loops in times of financial crisis have given short selling a bad reputation. The government has temporarily banned short selling during previous market downturns—like The Great Recession of 2008 and the early months of the COVID-19 pandemic—but experts argue whether those bans actually improved market stability or just distorted prices.

How did the bull and bear markets get their names?

The terms "bull" and "bear" are used to describe certain sentiments or activities in the financial markets. A bear market refers to declining stock prices and pessimistic outlooks, whereas a bull market represents the opposite.

Shorting is a high-risk and expensive investment strategy that hedge funds specialize in

Most investors buy stocks with the expectation that those stocks will be worth more tomorrow than they are today. Short selling, known as “shorting,” a stock is the opposite: The investor is betting the stock will drop in value.

Stock buybacks are when a company purchases some of its own shares of stock

This reduces the number of shares on the market and, therefore, makes the remaining shares more valuable. Buybacks have received a lot of criticism in recent years for many reasons, such as how they could artificially inflate share prices.

Activist investors use large ownership positions to influence companies

By holding large ownership positions, which often come with leveraged access to a company's board or the ability to force a shareholder vote, activist shareholders can change a company's corporate governance, leadership, and overall direction. Critics argue that activist shareholders hurt companies in the long term by prioritizing short-term higher shareholder returns over sustainability and growth efforts.

Retail investors are not professionals—they invest their own money

For retail investors, the stakes may seem higher and more personal. Critics say that this dynamic means that retail investors are more susceptible to behavioral biases that could lead them to make poor decisions when it comes to buying and selling assets. For instance, fear of missing out could cause a retail investor to buy a stock that is popular but not a financially worthy investment.

How one supplement company cost a short seller $1B

Pershing Square, a hedge fund founded and run by Bill Ackman, put short positions on Herbalife in 2012, because it believed the company was a pyramid scheme. Ackman's longtime rival and legendary investor Carl Icahn began buying Herbalife shares, causing the stock price to rise—ultimately hurting Pershing Square's short position.

Herd behavior is one cause of economic bubbles

A video breaks down the core forces behind economic bubbles, illustrating how forces including cheap credit, soaring optimism, and feedback loops push asset prices far beyond fundamentals—until a single shock triggers panic, selling and a rapid collapse.

Insider trading is the practice of trading a company's securities based on material, nonpublic information

"Material, nonpublic" information is essentially any undisclosed information that could have a substantial impact on an investor's decision to trade a security. While the practice is strictly prohibited on the stock market, it's now being discussed regarding less-regulated but increasingly popular prediction markets.

Smart pricing algorithms can unintentionally work together to raise prices

Researchers have found that, through trial and error, algorithms designed to adjust prices based on market data can learn to mimic price-fixing tactics, even without explicit programming to do so. Over time, they "learn" that it is more profitable to avoid price wars and keep prices high when competitors lower prices.

Chapter 7 and Chapter 11 filings can impact common stockholders

Publicly traded companies don’t file for bankruptcy out of nowhere—there are typically warning signs in a stock’s performance, quarterly earnings calls, and US Securities and Exchange Commission filings.

Some companies like to make their IPO day antics unique

An article details some of the wildest bell-ringing day stunts in recent history, from Clifford the Big Red Dog ringing the opening bell to one company's employees roasting marshmallows in a campfire on Wall Street as it went public.

Fancybear: The state-backed hacker cell

Fancy Bear (APT28) is a Russian-based hacker group that targets a variety of organizations across the globe. Learn how to prevent Fancy Bear.

The Reddit forum r/WallStreetBets is a place to discuss high-risk trading strategies

r/WallStreetBets is a forum (aka a “subreddit”) on the social media platform Reddit that was started in 2012. Later, r/WallStreetBets evolved into a place where unconventional investment approaches were not just tolerated, but planned and celebrated. It’s perhaps most famous for its role in the GameStop saga.

Marketers often use psychological tactics to sway consumer action

From making someone feel as though a resource is scarce (“only one item left in stock!”) to invoking a sense of authority (“top dentists recommend this toothpaste”), marketers use a variety of psychological tactics to elicit a desired response from their target audience.

Standard Oil's predatory business practices included temporarily operating at a loss to drive competitors out of business

Rockefeller's oil monopoly had a dark side, including cutting oil prices so low that Standard Oil was sometimes temporarily operating at a loss in order to drive competitors out of business.

Famed American investor Jesse Livermore made millions when the stock market crashed in 1929

Livermore made his first major short against rail company Union Pacific in 1906, coincidentally before an earthquake in San Francisco, which ultimately tanked share prices. During a financial panic the next year, JP Morgan reportedly asked Livermore to increase his long-term investments to restore hope and restabilize the market—which Livermore did. However, Livermore began betting against the market in 1929, sensing that stocks were too hot, and was one of the few people to benefit from the 1929 stock crash.

Tax-loss harvesting is a way that some people attempt to trim their tax bills

Specifically, tax-loss harvesting is a way to lower your tax bill by offsetting investment gains with losses. It can be tricky to practice and comes with a few important rules, so working with an expert may be your best bet before Tax Day.

A barbell investment strategy focuses on balancing high-risk and low-risk investments

Barbell investment strategies emphasize bypassing medium-risk investments in favor of combinations of high-risk and low-risk investments. The idea is that the stability on the low-risk side offsets the volatility on the high-risk side, and would look like a barbell with two large weights on either end of the bar.

Learn about the Black Bear Sports Group—a hockey conglomerate changing the ice rink industry

Ice rinks are notoriously difficult to operate, due to the complex cooling systems required to maintain the ice itself, and have an average operating lifespan of 25 years. However, Black Bear Sports Group has made millions by buying up failing ice rinks and running robust youth sports programming.

It’s an investment banker’s job to raise money for the bank’s clients

Investment bankers do this in a multitude of ways, such as selling securities, or acquiring other companies.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

In recent years, orcas have begun sinking boats and other orcas are following in their footsteps

For just over five years, killer whales have been ramming (and occasionally sinking) expensive yachts, sailboats, and fishing boats in waters near European coasts. Scientists believe these incidents are the result of play rather than aggressive attacks.

The rise of the malicious use of drones

Drones are legally categorized as aircraft, so when homeowners see a drone hovering over their private property, it is illegal to shoot them down. As drones become more commercially available, their illicit use is also increasing. Celebrities have reported incidents of drone privacy invasions and events planners often deploy anti-drone systems to prevent incursions.

The Army–Navy rivalry has a long history of mascot heists

For decades, spirited cadets and midshipmen have plotted covert missions to steal each other’s mascots—Army’s mule and Navy’s goat—turning the already fierce football rivalry into a game of elaborate pranks and counter-pranks.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

A 2019 Facebook event called on attendees to "Storm Area 51, They Can't Stop All of Us," resulting in countless memes, the creation of a music festival, and eventually the arrests of those who did try to approach the area.

Watch how deep-sea mining equipment collects and processes polymetallic nodules—metal-rich, potato-shaped rocks—from the ocean floor and creates environmentally damaging plumes of sediments.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

During the French Revolution, a botanist's letter asking about "dear Rhus" (poison ivy) was intercepted, leading authorities to suspect he was conspiring with the Russians.

The 1987 Nintendo video game 'Stadium Events' isn't known for being particularly fun, but its scarcity has made it a highly sought-after item that has sold for up to $35K at auction.

Experimental hantavirus vaccines and therapies, still under development, have long been funded by the US military.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Hotels in Cannes, the glamorous city on the French Riviera, hire hawks to ward off seagulls during the city's famous film festival.

Elk Cloner, the first computer virus to spread in public, was written as a practical joke by Richard Skrenta, a Pittsburgh high school student.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

Some Pokémon have been named after real and fictional organisms, while some real-world species have been named after Pokémon, such as Chilicola charizard and Binburrum zapdos.

Fireworks make a loud booming sound after exploding due to air expanding faster than the speed of sound.

The Ramones' 'Pet Sematary,' the theme song for the Stephen King novel of the same name, was written while the band was admiring the writer's collection of horror memorabilia.

In 2018, 26-year-old missionary John Allen Chau was killed by tribesmen after attempting to reach and evangelize on India's isolated North Sentinel Island

Sony set the standard for cylinder-shaped batteries when it repurposed manufacturing equipment used to make rolls of magnetic recording tape.

Crows are believed to have intelligence on par with a seven-year-old child and demonstrate complex behaviors, from problem-solving with tools to recognizing human faces.