I have a question that might appear simple for the more experienced here.
I'm trying to understand the concept behind short squeezes and i'm a little lost.
From what I understood:
Short selling consists of borrowing shares selling them and buying them back at a later point in time. The time when the shares need to be bought back is at a fixed point in time.
The time needed to cover short is calculated by the short interest. The higher this number is the more convicted bears are about their negative position.
Short sellers are very sensitive to a rise in the stock price often leading to short squeezes which in turn have a snowball effect on other short sellers needing to cover their positions. In this paper it stated
short selling of a stock does not completely translate into an increase in short interest. https://www.fmaconferences.org/Orlando/Papers/Short_selling_duration_and_return_predictability.pdf
My first question is: Is there a way to find out what the critical price of the stock aproximately is at which point most shares were sold short?
My second: Why not buy put options instead since the theoretical downside is limited compared to short selling where the downside is unlimited.
thank you in advance for any input!