Most heavily shorted stocks worldwide 2024

As of June 17, 2024, the most shorted stock was for, the American holographic technology services provider, MicroCloud Hologram Inc., with 66.64 percent of their total float having been shorted. This is a change from mid-January 2021, when video game retailed GameStop had an incredible 121.07 percent of their available shares in a short position. In effect this means that investors had 'borrowed' more shares (with a future promise to return them) than the total number of shares available for public trading. Owing to this behavior of professional investors, retail investors enacted a campaign to drive up the stock price of Gamestop, leading to losses of billions when investors had to repurchase the stock they had borrowed. At this time, a similar – but less effective – social media campaign was also carried out for the stock price of cinema operator AMC, and the price of silver.

What is short selling?

Short selling is essentially where an investor bets on a share price falling by: borrowing a number of shares selling these shares while the price is still high; purchasing the same number again once the price falls; then returning the borrowed shares at a profit. Of course, a profit will only be made if the share price does fall; should the share price rise the investor will then need to purchase the shares back at a higher price, and thus incur a loss. Short selling can lead to some very large profits in a short amount of time, with Tesla stock generating over one billion dollars in short sell profits during the first week of March 2020 alone, owing to the financial crash caused by the coronavirus (COVID-19) pandemic. However, owing to the short-term, opportunistic nature of short selling, these returns look less impressive when considered as net profits from short sell positions over the full year.

The risks of short selling

Short selling carries greater risks than traditional investments, and for this reason financial advisors often recommend against this strategy for ‘retail’ (i.e. non-professional) investors. The reason for this is that losses from short selling are potentially uncapped, whereas losses from traditional investments are limited to the initial cost. For example, if someone purchases 100 dollars of shares, the maximum they can lose is the 100 dollars the spent on those shares. However, say someone borrows 100 dollars of shares instead, betting on the price falling. If these shares are then sold for 100 dollars but the price subsequently rises, the losses could greatly exceed the initial investment should the price rise to, say, 500 dollars. The risks of short selling can be seen by looking again at Tesla, with the company causing the greatest losses over 2020 from short selling at over 40 billion U.S. dollars.