  In this paper, we propose a clearing model for prices in a financial markets
due to margin calls on short sold assets. In doing so, we construct an explicit
formulation for the prices that would result immediately following asset
purchases and a margin call. The key result of this work is the determination
of a threshold short interest ratio which, if exceeded, results in the
discontinuity of the clearing prices due to a feedback loop. This model and
threshold short interest ratio is then compared with data from early 2021 to
consider the observed price movements of GameStop, AMC, and Naked Brand which
have been targeted for a short squeeze by retail investors and, prominently, by
the online community r/WallStreetBets.
