B. Riley Financial (RILY) has 53% short interest.

That’s not a typo. More than half the tradeable shares are sold short.

And here’s the beautiful part: the shorts think they’re smart.

Nasdaq delisting threat, delayed filings, all the headline risk you could want. Perfect storm for shorts to pile in and get greedy.

They’re about to learn why extreme short interest is dangerous.

What Makes Short Squeeze Stocks So Attractive

When you find a stock with massive short interest, you’re not just buying shares – you’re buying forced demand waiting to happen.

Here’s how it works: every short sale creates future buying pressure. The short seller borrowed shares and sold them, but eventually has to buy them back. That’s not optional – it’s required.

Normal short interest runs 2-5%. When you see 20%, that’s high. At 53%, you’re looking at a coiled spring.

The moment RILY shows any strength, shorts start getting margin calls. And when shorts cover, they don’t care about price – they just need out. That creates the explosive moves that make short squeezes legendary.

The Perfect Storm Setup

Last Friday’s Nasdaq delisting notification was a gift to shorts. Bad headlines, fear, uncertainty – everything they needed to justify massive short positions.

But here’s what they missed: RILY has until September 29th to get compliant. That’s months, not days. The immediate panic is overblown.

Meanwhile, all that short interest sits there like dry kindling. One spark and the whole thing goes up.

I also have a history with this stock, about a year ago, I nailed a quadruple-digit winner in this playing for a short squeeze.

Can lightning strike twice?

The Level That Matters

I’m watching $3.34 – Tuesday’s high.

If RILY clears that level with any conviction, the short covering begins. At 53% short interest, even a small breakout becomes explosive as shorts rush for the exits.

That’s when 53% short interest becomes someone else’s nightmare.

Position Sizing Is Everything

Look, this is high risk, high reward. Don’t bet the farm on it.

Short squeeze plays can double, triple, or even quadruple your money with options. But there is a really good reason, RILY is trading down so much, it’s a company with a lot of problems.

If the squeeze doesn’t materialize, you could get hurt.

Size your position accordingly. This is speculation, not investment. Risk what you can afford to lose, not what you need to keep.

Your Action Plan

Watch for the break above $3.34. That’s your signal the squeeze might be starting. Don’t chase – wait for the level, then act decisively.

I’ve loaded up on some $3 calls, they’re cheap. But I’m viewing this as a “lotto” trade. If it hits, awesome. If it doesn’t, no big deal.

While I don’t mind a “lotto” trade every now and then, I make my best trades from high probability setups.

And one of my favorite trades right now is trading stocks centered around earnings.

It has nothing to do with making directional gambles on the day of earnings. This strategy is all about precision and meeting a specific set of criteria.

And when they meet, you could see gains north of triple-digits in just a matter of minutes.

If you’d like to learn more about this powerful strategy, click here to learn more.