Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

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to learn more. Okay, so short squeezes have been all over the news this year, as retail

investors banded together to spoil the fund for hedge funds in some well-known stocks. Short

squeezes are not new though. They've been around as long as short selling has.

In today's video we look at the most extreme short squeezes in market history to see what

lessons we can learn. These are some of the most exciting finance stories you'll ever hear.

Short selling involves borrowing stock from another investor and selling it in order

to profit from a fall in the stock price. When you do this though, you put yourself in

a very risky position. A short squeeze is what happens when the stock rises dramatically,

forcing short sellers to buy the stock back to limit their losses.

In such situations, a trader has no choice.

Staying in the position can mean bankruptcy.

At number 10 on our list we have Cornelius Vanderbilt and the Harlem Railroad.

In 1862, Vanderbilt began buying the stock of the unprofitable Harlem Railroad at $8 a share.

When he had bought enough shares to gain control of the company, he began to make improvements to the line.

In 1863, the City Council of New York approved Vanderbilt's request to build a brand new line along

Broadway to the battery. The stock surged to $100 in a few days. Not a bad return. This

approval meant that it was not only the only railroad entering New York City, but it would

also be the only line running the full length

of Manhattan. At the same time that Vanderbilt was buying the stock, members of the New

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