Investor Lingo, “Squeeze”

I figured this would be a good term to use for today’s stock market lingo. Now, before I get into what a “squeeze” is I just want to clarify that I am not referring to a short squeeze (I am saving it for a rainy day!).

When we apply “squeeze” to a company, we apply it in the sense it is first though of. If I am running company XYZ, and I want to decrease my costs, I will pass them onto the customer by increasing the price of the product or service I am supplying.

But, after a period of time that becomes tough, and eventually since we cannot pass anymore costs on, our profits to drop. Why? Because of a “squeeze” in our profit margins. Interesting isn’t it?

Discuss this post in the StockTradingToGo Forum.

Subscribe To StockTradingToGo.com