Top Investment Broker Short-Squeeze Plays

Updated from 7:59 a.m. EDT

The recent SEC emergency order against naked short-selling in the stocks of investment brokers and commercial banks may create some attractive short-squeeze opportunities.

A short squeeze takes place when a stock's short-sellers cover their positions quickly when good news boosts the price of the stock. This short-covering often drives the stock price even higher. The metric for measuring short-squeeze plays is the short ratio, which represents the number of days it would take a stock's short-sellers to cover their positions based on the stock's recent average daily volume.

With this in mind, here at Stockpickr, we've come up with a list of the top investment broker short-squeeze plays. The portfolio includes KBW(KBW Quote) and optionsXpress Holdings(OXPS Quote).

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A note from James Altucher:

Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.

Here are some examples:

• Stocks related to drilling the Marcellus Shale
• MLPS with yields above 7%
• Microcaps trading for less than tangible book
• Stocks that do well after Hurricanes

Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other hedge fund managers on my list.

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