Here are 10 of the most shorted stocks based on short float percentage. Short float percentage refers to the percentage of a company\u2019s stock that institutional investors have shorted compared to the stock available for public trading.<\/p>
| Stock<\/th> | Short float %<\/th> | 1Y performance<\/th><\/tr><\/thead> |
|---|---|---|
| Digital Brands Group Inc. (Nasdaq: DBGI)<\/td> | 58.56%<\/td> | -98.37%<\/td><\/tr> |
| Kalera Public Limited Company (Nasdaq: KAL)<\/td> | 55.46%<\/td> | -99.13%<\/td><\/tr> |
| OncoSec Medical Incorporated (Nasdaq: ONCS)<\/td> | 49.49%<\/td> | -94.00%<\/td><\/tr> |
| Mullen Automotive, Inc. (Nasdaq: MULN)<\/td> | 47.40%<\/td> | -95.24%<\/td><\/tr> |
| Carvana Co. (NYSE: CVNA)<\/td> | 46.21%<\/td> | -97.68%<\/td><\/tr> |
| Bed Bath & Beyond Inc. (Nasdaq: BBBY)<\/td> | 46.20%<\/td> | -82.15%<\/td><\/tr> |
| Tricida, Inc. (Nasdaq: TCDA)<\/td> | 44.58%<\/td> | -98.02%<\/td><\/tr> |
| PaxMedica, Inc. (Nasdaq: PXMD)<\/td> | 44.46%<\/td> | -48.65%<\/td><\/tr> |
| Beyond Meat, Inc. (Nasdaq: BYND)<\/td> | 42.33%<\/td> | -78.11%<\/td><\/tr> |
| Silvergate Capital Corporation (NYSE: SI)<\/td> | 39.88%<\/td> | -87.27%<\/td><\/tr><\/tbody><\/table> Source: MarketWatch (Dec. 14, 2022)<\/small><\/p> When shorting a stock, investors borrow and resell stocks they believe will decline in value. These investors hope the stock will continue to fall in value, so they can buy back the stocks at a lower price and pay off the loan, pocketing the difference.<\/p> Essentially, it\u2019s betting that the value of a stock will fall. If you\u2019re right, you make money. If you\u2019re wrong, you could lose a lot more than you bargained for. That\u2019s because there aren\u2019t any limits to how high a stock\u2019s price may rise, and the more it rises, the more you lose.<\/p> Taking a contrary position to shorting can be profitable, too. By investing in a shorted stock, you contribute to the stock\u2019s value. As a result, the stock price rises and puts pressure on those with short positions to close positions by buying even more \u2014 which drives the price up further.<\/p> Why do shorted stocks matter?<\/h3>For evidence of the power of shorted stocks, look no further than GameStop.<\/p> In January 2021, GameStop was among the most shorted stocks on Wall Street. The hedge funds that bet against it stood to make a lot of money if GameStop\u2019s stock stayed low. But participants in the Reddit message board Wallstreetbets<\/a> noticed the GameStop shorting trend and decided to raise its price and squeeze hedge funds that had bet against the company.<\/p> Thanks to Reddit, retail investors flocked to buy GameStop\u2019s stock. As a result, the stock skyrocketed in value by over 1,000%. And the hedge funds that shorted the stock lost billions.<\/p> There\u2019s money to be made in shorting stocks, but the GameStop rollercoaster ride demonstrates just how dangerous and temperamental the game can be. Before getting involved, investors should exercise caution.<\/p> |