Short Sellers Face $73 Billion Losses in 2025 Market Rally
Short sellers have endured significant losses in the first quarter of 2025 as the stock market has surged. Data from S3 Partners reveals that short sellers in US and Canadian markets have lost approximately $73 billion year-to-date.
"The rally in the market was not kind to short sellers," stated Ihor Dusaniwsky, S3 Partners' Head of Predictive Analytics.
Despite the S&P 500 (^GSPC)'s 4% gain this year, several index constituents have experienced dramatic increases, partly attributable to short squeezes. Super Micro Computer (SMCI) has risen by over 110% since年初, resulting in short-seller losses exceeding $2.2 billion.
A short squeeze occurs when a significant number of investors bet against a stock and it subsequently rallies. In such cases, short sellers are forced to buy the stock to cover their positions, further driving up its price. Notably, a short squeeze was a key factor in the "meme stock mania" of 2021, with GameStop shares soaring by over 134% in a single day.
"Short sellers are guaranteed future buyers ... when shorts are getting squeezed, these can become forced liquidations," commented JC Parets, Chief Market Strategist at All Star Charts.
S3 Partners' model assesses a stock's "squeezability" based on a "squeeze score." A score over 70 indicates exposure to a short squeeze, while a score of 90 signifies extreme susceptibility. Super Micro Computer currently has a score of 100.
Hims & Hers Health (HIMS), Oklo (OKLO), and BigBear.ai (BBAI) are among other stocks with high squeeze scores that have experienced significant gains this year. Hims stock surged by 22% on Wednesday after announcing plans to offer at-home lab testing. Short sellers have lost nearly $2 billion betting against Hims & Hers.
"Any short sellers who overstayed their welcome are getting blown up," said Parets. "This is a classic characteristic of healthy bull market environments."