After a couple of weeks of steady losses, the stock market is now in all-out frenzy mode. Massive drops or eye-popping gains are the norm these days, creating havoc for anyone trying to establish a foothold with long or short-oriented investments. In fact, short sellers are the most exposed in this current era of high volatility, even with their potential of reaping huge gains, as they have recently. Short sellers need to watch out for sudden rallies. If they are targeting a heavily-shorted stock, then a short squeeze could push up… Read More
After a couple of weeks of steady losses, the stock market is now in all-out frenzy mode. Massive drops or eye-popping gains are the norm these days, creating havoc for anyone trying to establish a foothold with long or short-oriented investments. In fact, short sellers are the most exposed in this current era of high volatility, even with their potential of reaping huge gains, as they have recently. Short sellers need to watch out for sudden rallies. If they are targeting a heavily-shorted stock, then a short squeeze could push up the stock up faster than the broader market, creating potentially huge losses for shorts — yet equally large gains for investors who went long. With this in mind, I’ve been looking at the just-released short-interest data, which tallies the short-interest levels in stocks as of July 28. The size of these short positions may have changed since then, but almost all of the most heavily-shorted stocks are likely to remain near or atop the leader board when we get the next round of data that tracks short levels through Aug. 15. Make no mistake,… Read More