Short bets on US stocks reach record high despite market gains

Investing.com -- Short interest in US stocks has climbed to record levels even as markets have posted gains, with the S&P 500 rising 18% since late March.

Short interest in S&P 500 Index stocks stands near 3.79% of free float, marking an all-time high in data tracked by S3 Partners LLC since 2010. For Russell 3000 companies, the figure recently reached 6.3%, also a record.

The S&P 500 fell 1.6% last week amid concerns about artificial intelligence spending and competition from China.

"Short selling has increased and the breadth of names shorted has increased," said Ihor Dusaniwsky, manager of predictive analytics at S3 Partners.

The bull market in US equities, which has lasted nearly four years, has pressured many short sellers to hedge their bearish positions with net-long bets. Investors currently hold roughly twice as much in long positions compared to short positions, according to S3 Partners data.

Space Exploration Technologies Corp. ranked as the ninth-most shorted stock in the US market before Friday's decline, with $25 billion in bets against it, representing nearly 29% of its float. SpaceX shorts have gained nearly 28% or $4.8 billion in mark-to-market profits so far this year, S3 data showed.

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