Analysis: Short positions in U.S. stocks reach multi-year highs, the highest level since 2012

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Golden Finance reports that on May 26th, U.S. stock short positions have reached multi-year highs, with the median stock in the S&P 500 having a short position of 3.0% of its market value, the highest level since 2012, equivalent to twice the level during the 2020 pandemic. In comparison, during the 2008 financial crisis, the median stock short position in the S&P 500 was 3.8%.
Additionally, among the top 10% of stocks with the heaviest short positions in the S&P 500, the short position has risen to 8.0% of market value, the highest since 2018. These two indicators are even higher than during the bear market following the dot-com bubble burst in 2000. The market may be preparing for a potential short squeeze, where massive short liquidations could trigger sharp, rapid violent rallies in the short term.
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