Post-election, Trump Media and Technology Group (DJT) stock has surged 38% with volatility expected to normalize closer to inauguration. The stock has become highly volatile and could face a short squeeze due to significant short interest, low float, and substantial recent losses for short-sellers.

After Trump's election victory, the DJT stock, which was trading as a proxy for the election, is up 26%.

In the final week before the election, the stock stopped trading as a proxy and became more volatile, moving in a more chaotic fashion.

The box highlights the period when the price tracked the probability, while the oval indicates when it decoupled and became more erratic.

If we include the 12% move on Monday, the total gain is 38%.

Less than half of the shares are floated, which increases volatility on news and amplifies the short position relative to the float.

The squeeze risk indicator was as high as 100% the last time the stock rallied to this level. This indicator takes into account both the size of the short position (the "crowded score," which is 60) and the short-term stock return.

Simply put, shorts have experienced significant losses recently, and some may cover their positions to reduce risk. This could trigger a short squeeze.

Today alone, the loss is 14 million shares at $5.50 per share, or $77 million, similar to Monday. The 14 million shares have been relatively constant, representing 17% of the float.

Since the DJT stock began tracking Trump's election odds, the total loss is $420 million.

Donald Trump owns more than half the company and has gained $3.4 billion. While Trump has stated he will not sell his stake, if he were to sell for any reason, the stock would likely decline.

We previously reported that the options market was pricing in a 50% move either way. This included the possibility of a 50% move on multiple days, such as in the case of an extended or disputed election, which did not occur.

The market is now pricing in continued high volatility but expects it to normalize by the time of the inauguration.

The recent volatility in DJT has been election-related and has been twice the average. The average daily move has been 12%, compared to 6% earlier in the year.

With heightened volatility and short interest; a lack of earnings and borrow liquidity, and a loyal retail following/fanbase, DJT checks the boxes as a meme stock.

The election-driven volatility surrounding DJT stock has impacted traders and short-sellers alike. With a crowded short position and increased volatility, DJT remains a unique post-election focus for market participants.

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