Category: Shorting

20 Stocks With More Than 30% of Float Shorted: Short Squeeze Plays

by Fred Fuld III

Are you looking for some short squeeze plays? Are you looking for stocks that have over 30% of their float shorted?

Here is a list of 20 stocks that fit this criteria.

Altimeter Growth Corp. AGC
Beam Global BEEM
BEST Inc. BEST
Big 5 Sporting Goods Corporation BGFV
Blink Charging Co. BLNK
Esperion Therapeutics, Inc. ESPR
Arcimoto, Inc. FUV
Canoo Inc. GOEV
Intercept Pharmaceuticals, Inc. ICPT
Kaixin Auto Holdings KXIN
Nikola Corporation NKLA
NeuroPace, Inc. NPCE
PubMatic, Inc. PUBM
Lordstown Motors Corp. RIDE
Reneo Pharmaceuticals, Inc. RPHM
SmileDirectClub, Inc. SDC
Support.com, Inc. SPRT
Tattooed Chef, Inc. TTCF
View, Inc. VIEW
VPC Impact Acquisition Holdings VIH

 

Disclosure: Author didn’t own any of the above at the time the article was written.

Stocks with the Highest Short Interest: Short Squeeze Plays

by Fred Fuld III

As I write this, the Dow Jones Industrial  Average is down 477, and the S&P is also down. Maybe while the market has dropped so much, now might be the time to look for short squeeze opportunities.

Here is a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % Float Shorted Days to Cover Stock Price
Workhorse WKHS 35% 2.2 8.97
Arcimoto FUV 34% 5.4 10.94
Blink BLNK 34% 6.2 30.09
Support.com SPRT 33% 1.5 8.31

So as an example, Arcimoto has 34% of the float shorted, and it will takeover five days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written

Top Short Interest Analyzers

by Fred Fuld III

NASDAQ has a service on their site which allows you to check on the short interest on any NASDAQ stock for any month.

For example, if you enter Sundial (SNDL) [short interest is measured on the 15th of every month], you come up with the fact that the short interest is 267,716,798 shares, an increase of 4.47% from the prior month, with an average daily share volume of 208,079,855 and 1.29 days to cover.

For NYSE stocks, such as GameStop (GME) and AMC (AMC), check out Shortsqueeze.com. It will give you the following:
Short Interest Ratio (Days To Cover)
Short Percent of Float
Short % Increase / Decrease
Short Interest (Current Shares Short)
Shares Float
Short Interest (Prior Shares Short)

There is also a website called Shortinterest.com which shows the top shorted stocks.

Disclosure: Author owns SNDL.

Have We Seen the Top of the Stock Market? Probably

by Fred Fuld III

A week ago, on Monday, May 10, 2021, the SPY was trading at the 422 level. Also on the same day, the Dow Jones Industrial Average 35,091.56. Since then,   we haven’t traded even close to those levels.

SPY

The SPY has dropped about 2.7% since that time and may have further to go.

Dow Jones Industrial Average

The Dow has dropped about 2.9% since then and it looks like we could see lower levels.

There are all kinds of fundamental and technical reasons why the stock market may continue to drop, and we may never see the highs of las Monday for a long, long time. However, in this case, this is only a hunch, not a recommendation to sell or short (or even buy). It is just my opinion that we are headed into a bear market.

No recommendations are expressed or implied.

Top Short Squeeze Stocks

by Fred Fuld III

Remember when GameStop (GME) went up over 700% in five days due to a short squeeze? The movie theater chain, AMC (AMC) increased by over 1,000% in ten days from a short squeeze.

Here is a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % Float Shorted Days to Cover Stock Price
PubMatic Inc. PUBM 45.53% 4.3 36.43
Esperion Therapeutics ESPR 41.16% 14 22.32
Ontrak Inc. OTRK 39.69% 3.3 31.71
Blink Charging Co. BLNK 37.78% 2 30.94

So as an example, Esperion has over 41% of the float shorted, and it will take 14 days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written.

Top Low Priced Short Squeeze Stocks

by Fred Fuld III

Unless you haven’t paid any attention to financial news at all, you probably already know that GameStop (GME) has gone up over 700% in the last five days. The movie theater chain, AMC (AMC) was available for a little over two bucks ten days ago. Today, it traded for 25.80 this morning in pre-market trading.

You also probably know that these huge gains have been caused by short squeezes.  Back on September 18 last year, I published an article called Top Restaurant Short Squeeze Stocks, and it listed four companies that were heavily shorted. In just the last four months, those stocks have had stellar returns.

The worst performing stock was up 38%. Not a bad return for four months. The best performing was Dave & Busters (PLAY), which was up 138%. Here are those four stocks, with the percent of float shorted at the time, the days to cover at the time, and the return if you had bought the stock back then and sold today.

Stock Symbol % of Float Days to Cover % Gain
Shake Shack SHAK 26% 5.7 85%
Dave & Buster’s PLAY 33% 1.8 136%
Red Robin RRGB 35% 3.4 64%
El Pollo Loco LOCO 19% 11.2 38%

Many of the heavily shorted stocks you have seen on the news during the last couple days are high priced, with a majority of them trading over $100 a share. That’s a lot of risk. So If you are looking for low priced stocks that might be short squeeze plays, I will cover that shortly.

But first, a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % of Float Days to Cover Stock Price
Ayro AYRO 23.28% 0.51 7.24
Clovis Oncology CLVS 42.43% 6.54 7.94
Senseonics SENS 30.95% 1.36 2.51
TherapeuticsMD TXMD 28.89% 14.30 1.59
VBI Vaccines VBIV 25.64% 6.62 3.15

So as an example, VBI Vaccines has over 25% of the float shorted, and it will take over six days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock selling for less than $10 a share, I wouldn’t want to waste any time covering my position, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author owns TXMD. No recommendations are express or implied.

 

Top Tech Short Squeeze Stocks

by Fred Fuld III

Many technology stocks are making all time highs, whereas others are sinking. Several of these tech stocks are heavily shorted.  When stocks rise quickly in price for whatever reason, short sellers scramble to cover their positions by buying shares, and causing the price of the stock to increase even more.

Traders and investors can make money on the long side from short squeezes. One technique that stock traders utilize is buying short squeeze stocks, companies have been heavily shorted. Here is a more extensive explanation of  short squeezes.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Here is one example from the list below.  Ebix Inc. (EBIX) is a stock that is heavily shorted. As a matter fo fact, 32% of the float is shorted. Plus, the short interest ratio is 11.7. That means it would take the short sellers over eleven days to cover their positions, based on the number of shares that trade each day on average.

So what technology stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason.

All these stocks have significant short metrics, but they also have price to earnings ratios less than 15 and price to earnings growth ratios of less than 2..

Possibly a short squeeze will cause a few of these to rise sharply, turning lemons into lemonade.

Stock Symbol % of Float Days to Cover
3D Systems DDD 31% 14
Ebix EBIX 32% 11.7
Inseego INSG 34% 5.1
iRobot IRBT 32% 8.1

Disclosure: Author didn’t own any of the above at the time the article was written.

How to Protect Yourself in a Bear Market

by Fred Fuld III

There are several strategies to make money in a bear market, some speculative, and some not so risky. Even smaller investors have ways to protect themselves, and even make money on the downside. We have had a strong stock market for the last eleven years, and many investors think that we are heading into a bear market. Here are several strategies to choose from.

1. Shorting Stocks

This is one of the most speculative ways of making money in a bear market. In simple terms, you make money when the stock goes down and you lose money when the stock goes up. What technically happens is that you borrow the shares and immediately sell them (this all is done electronically through your brokerage firm) and since you owe those shares, you eventually have to buy them back at some price, hopefully a lower price, in order to return those hares. The difference between your sale price and eventual purchase price is your profit (or loss, if you buy back at a higher price).

Can you make a lot of money shorting stocks in a bear market? Yes. Is it speculative? Very. Can you lose a lot? Most definitely. This is why it is so risky. When you short a stock, the lowest point it can drop to is zero. Whereas, if the stock goes up, the amount it can rise is unlimited. Let’s say you short 100 shares of a stock at $20 a share. If you put up funds equal to 100% of the value of the shorted amount, and the stock drops to zero, you’ve made a 100% return. However, suppose the stock goes from 20 to 100, you end up losing 400% of your money with lots of margin calls along the way. But even on a short term basis, an investor can lose money very fast.

So in summery, do I think you should short stocks? Absolutely not, unless you are a professional trader. The risk is unbelievable. If you understand options real well, hedged short selling might be OK, as long as you are an advanced trader, and know what you’re doing.

2. Short (Bearish) ETFs

An ETF appeared on the scene several years ago which has become very popular, a type of Exchange Traded Fund called the Bearish ETF or Short ETF. What these ETFs do is provide a return opposite to the return of the index, industry, or sector that it is tracking.

For example, the Short Dow30 ProShares (DOG) provides a return that is the inverse of the Dow Jones Industrial Average. If the Dow goes down 2%, the DOG goes up 2%. The Short QQQ ProShares (PSQ) ETF gives a return that is the inverse of the NASDAQ 100 Index. If you are bearish on gold, you can buy the PowerShares DB Gold Short ETN (DGZ) ETF.

The nice thing about these short ETFs is that your losses are limited. Also, if you are long individual stocks that you don’t want to sell, these can be good for protecting your portfolio on the downside.

3. Leveraged Bearish ETFs

If you like volatility, you will love the leveraged bearish ETFs. What these ETFs do is provide double, and in some cases triple the inverse return of indices.Some examples include the UltraShort Consumer Services ProShares (SCC) and the ProShares UltraShort S&P S&P 500 (SDS).

In addition there are several triple leveraged bearish ETFs. Direxion Daily MCSI Real Estate Bear 3X Shares (DRV), Direxion Daily Energy Bear 3X Shares (ERY), and ProShares UltraPro Short Russell 2000 (SRTY) are just a few of the many 3X bearish ETFs.

The volatility of these things is substantial, and so are the wide bid and asked spreads that I’ve seen occasionally.

The advantage of these trading vehicles is that they are a way of shorting on margin, with a limit on the downside. The disadvantage is that the losses are quick and large, especially with the triple leverage short ETFs.

4. Bear Funds

It may be hard to believe, but there are actually a large number of bearish mutual funds for the long term bearish investors. These include the Grizzly Short Fund (GRZZX), the PIMCO StocksPlus TR Short Strategy Institutional Fund (PSTIX), and the ProFunds Bear Investors Fund (BRPIX). These funds have minimum investments ranging from $1,000 to $5,000,000.

5. Puts

First, a little about option pricing.  Puts and calls are priced on a per share basis, so a put at $1 would cost $100 for 100 shares, or a call at $3.50 would cost $350.

A put is the option to put your stock to someone at a particular price within a certain period of time. In other words, if you own a stock that is trading at 22 and you buy a put at a dollar which gives you the right to put your stock to someone at $20 per share within three months, there are a couple of things that could happen. The stock could tank to $14 a share and you could put your stock at 20, or just resell the put for 6 and collecting the profit. You would be far better off than just doing nothing. And if the stock goes up or stays about the same, you are just out your $100 for the option. Puts can be useful for experienced traders.

6. Cash

There is one other way to make money in a bear market. Sell everything, and keep your money in cash, with the safest way being a T-bill money market fund, that only owns T-bills. (Money market funds that invest in repos are supposed to be just as safe, but I consider them slightly more risky than T-bills.) The advantages are that you can’t lose money and you can receive an income from the investment.

The alternative cash investment is putting your money in a bank certificate of deposit or savings account. Your money is safe up to the FDIC limits, but the interest rate can be very low.

If we are in a bear market, hopefully you can protect your portfolio and make a little on the downside.

Author does not own any of the above mentioned securities.

Top REIT Short Squeeze Stocks

by Fred Fuld III

There has been a significant amount of concern among investors regarding real estate investment trusts, more commonly referred to as REITs, especially the ones involved in the commercial and retail sectors. The concern comes from the explosion of online purchasing by consumers. Why go to a storefront when you can buy items from the comfort of your own home? However, this concern may be overblown, which could provide some trading opportunities.

If REITs are heavily shorted, the potential gains can be significant. When stocks rise quickly, no matter what the reason, short sellers scramble to cover their positions by buying shares, and causing the price of the stock to move up even more.

So how can you make money on the long side from short squeezes? One technique that stock traders utilize is buying short squeeze stocks, companies have been heavily shorted, hoping that good news will come out. Here is a more extensive explanation of what a short squeeze is.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders take advantage of this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Here is one example from the list below. Tanger Factory Outlet Centers (SKT) is a stock that is heavily shorted. As a matter fo fact, 49% of the float is shorted. Plus, the short interest ratio is 18. That means it would take the short sellers eighteen days to cover their positions, based on the number of shares that trade each day on average.

So what REITs are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason.

All these stocks have significant short metrics, however they all pay dividends.

Stock Symbol % of Float Days to Cover
CBL & Associates CBL 26.50% 16.5
Innovative Industrial Properties IIPR 28.20% 5.8
Pennsylvania REIT PEI 65.20% 21.1
Tanger Factory Outlet Centers SKT 48.90% 18
Seritage Growth Properties SRG 33.40% 53.7

Disclosure: Author didn’t own any of the above at the time the article was written.

Top Biotech Short Squeeze Plays

by Fred Fuld III

Many stocks in the biotechnology sector have been hit hard recently, possibly creating some buying opportunities. If any of these stocks are heavily shorted, then the potential gains can be substantial. When the stock rises fast for any reason, short sellers scramble to cover their positions by buying the stock, and thereby driving up the price of the stock even more.

So how can you make money on the long side from short squeezes? One technique that stock traders utilize is buying short squeeze stocks, companies have been heavily shorted. Here is a more extensive explanation of what a short squeeze is.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Here is one example from the list below.  GTX Inc. (GTXI) is a stock that is heavily shorted. As a matter fo fact, 23% of the float is shorted. Plus, the short interest ratio is 4.1. That means it would take the short sellers over four days to cover their positions, based on the number of shares that trade each day on average.

So what technology stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics, plus they are down by over 50% year-to-date.

Maybe a short squeeze will cause a few of these to rise sharply, and the lemons become lemonade.

Company Symbol Short % change from previous period % of Float Days to cover
 GTX Inc. GTXI 7% 23.66% 4.1
La Jolla Pharmaceutical LJPC 2% 89.29% 26.0
  Paratek Pharmaceuticals PRTK -3% 33.9% 10.9
 Portola Pharmaceuticals PTLA 9% 30.71% 80.07

Disclosure: Author didn’t own any of the above at the time the article was written.