You don't have to have over 100% but you do need a significant amount. For a squeeze to occur you have to have 1) some initial upward price movement and 2) enough short interest that as people get uncomfortable with the increased downside (or their broker calls them on their margin), they have to buy real shares to close out their short positions, thus increasing the upward pressure on the price. That drives the price higher, and causes more people to get uncomfortable and more margin calls to be made, driving the price even higher. Other people notice the price and trade volume going up and want in on the action, which drives the price even higher. This cascades until there are no more surviving short positions.
The whole thing about borrowing 200 cows is illustrating the concept of leverage, but it isn't necessary. We could have illustrated the concept of a short squeeze by saying the hedge fund borrowed 50 cows, and a Redditor noticed and bought 51 cows. When the hedge fund needs to close their position there are only 49 cows available and the Redditor can ask an insane amount of money for the last cow. And that isn't even really how a short squeeze works (see top paragraph).
A squeeze can happen with any amount of short interest. But if it's a tiny amount it will be swallowed by the other random noise in the market, and won't cascade into a giant news story. Gamestop had right around 150% short interest in December. The other crazy thing is not just the number of shares shorted, but what prices they might be at. The 50 day moving average is about $30. If you shorted at $30, you had a 500% downside yesterday. If you still weren't forced to close your position then you were at 1000% downside today. The one year low is $2.57. If you shorted any sizeable position at $2.57 you're probably thinking about jumping off a skyscraper.
The whole thing about borrowing 200 cows is illustrating the concept of leverage, but it isn't necessary. We could have illustrated the concept of a short squeeze by saying the hedge fund borrowed 50 cows, and a Redditor noticed and bought 51 cows. When the hedge fund needs to close their position there are only 49 cows available and the Redditor can ask an insane amount of money for the last cow. And that isn't even really how a short squeeze works (see top paragraph).
A squeeze can happen with any amount of short interest. But if it's a tiny amount it will be swallowed by the other random noise in the market, and won't cascade into a giant news story. Gamestop had right around 150% short interest in December. The other crazy thing is not just the number of shares shorted, but what prices they might be at. The 50 day moving average is about $30. If you shorted at $30, you had a 500% downside yesterday. If you still weren't forced to close your position then you were at 1000% downside today. The one year low is $2.57. If you shorted any sizeable position at $2.57 you're probably thinking about jumping off a skyscraper.