Stock Surge Spells Trouble for Short-Sellers: On Track for Worst Annual Losses Since 2020

The recent increase in stock prices is intensifying the challenges faced by short-sellers, who are poised to experience their most significant annual losses since 2020, as reported by Ortex, a data and analytics firm.

Short-sellers, who seek to make a profit by selling shares they’ve borrowed and repurchasing them later at a reduced price, have incurred losses exceeding $145 billion this year. This figure is based on Ortex’s examination of short interest in 1,500 U.S. stocks.

The stock market index has risen by 22.9% so far this year and is just approximately 2% shy of reaching an all-time high.

In terms of short interest, there was an increase of $9.8 billion over the course of the year. To provide context, in 2020, short interest surged by $95.84 billion, leading short-sellers to face losses amounting to $182.65 billion.