It was a tough start of 2025 for traders betting on shares.
Short sellers, who bet on stock prices, have lost $ 73 billion between the American and the Canadian markets to start 2025, according to data from S3 partners who are provided to Yahoo Finance.
“The rally in the market was not nice for Short sellers,” S3 Partners Head of predictive analyst Ihor Dusaniwsky told Yahoo Finance.
The S&P 500 (^GSPC) has risen by around 4% this year, but many companies within the index have risen higher, some partly due to short squeezing. Super Micro Computer (SMCI), the top performance in the index this year, has now risen more than 110% since the beginning of 2025. Short sellers have lost more than $ 2.2 billion if the shares have been sustained.
A short squeeze happens when a considerable number of investors has bet against a share to fall. As the stock rallies instead, those traders are forced to buy the share to cover their position and in turn send shares even higher. A short squeeze was the leading drive of the meme distribution mania in 2021 when Gamestop shares rose to more than 134% in one day.
“This is the thing about short sellers that I think will be forgotten,” wrote all the Strens -chief markets -strategist JC Parets in a note on Monday. “Short sellers are guaranteed future buyers … When shorts are pressed, they can be forced Liquidations.
And this year the market has seen enough of those forced liquidations. S3 Partners uses a model to characterize how “Knquezable” is a stock, with a “squeeze score” lecture of more than 70 indicating that a stock is exposed to a short squeeze and a lecture of 90 signaling that the stock “extreme sensitive “until a pinch. The lecture by Super Micro Computer is currently at 100.
Although perhaps the most controversial, Super Micro is far from the only stock that has seen big jumps as a result of short squeezes this year. Hims & Hare Health (HIMS) also has a lecture of 100 on S3’s Squeeze score, while OKLO (OKLO), a popular nuclear AI game and Bigbear.AI (BBAI) are both above 70. All three shares have 80% or more this year.
On Wednesday, HIMS shares added another 22% to his year to date after the Health and Wellness Platform said that it is planning to introduce laboratory tests via his platform. When we entered Wednesday, Short Sellers would have lost almost $ 2 billion gambling against HIMS & HARE shares.
“As more shares, more sectors and more countries around the world start to participate in this bull market, each of the short sellers who have blown them up for too long,” Parets wrote. “This is a classic feature of healthy bullmarket environments.”
