A short squeeze is a market situation where the lack of supply of an underlying asset drives prices upwards. This situation is often amplified by short sales or short positions built through derivatives contracts. In these cases, the parties will start buying to cover their losses and, ultimately, will accept to buy the underlying at any price to avoid defaulting on their obligations (which has damaging consequences) pushing the prices higher. Short squeezes are often the result of market manipulation. A famous short squeeze occurred in October 2008 on Volkswagen stocks, which increased by more than 300% in two days.