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snowballing
What does snowballing mean?
When a position's movement accelerates and compounds — losses (or gains) piling up faster and faster as momentum or forced trades feed on themselves.
"The margin calls started snowballing and the whole thing collapsed."
Origin
Common finance metaphor for compounding effects; used in WSB blowup and squeeze narratives.
Frequently asked questions
What does 'snowballing' mean in trading?
It describes losses or gains compounding faster and faster, as momentum or forced trades feed on themselves and the move accelerates out of control.
How does a loss snowball?
Falling prices can trigger margin calls, forcing sales that push prices lower still, triggering more margin calls — a self-reinforcing spiral.
Can gains snowball too?
Yes. In a squeeze, rising prices force shorts to cover, which drives the price higher and pulls in more buyers, compounding the gains.
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