BlockBeats news, on May 26, short positions in U.S. equities have reached a multi-year high, with the median stock in the S&P 500 experiencing short interest at 3.0% of its market capitalization—the highest level since 2012 and double the level seen during the 2020 pandemic. By comparison, during the 2008 financial crisis, short interest on the median S&P 500 stock stood at 3.8%.
Additionally, in the bottom 10% of S&P 500 stocks with the highest short interest, short positions have risen to 8.0% of market capitalization, the highest level since 2018. Both of these metrics now exceed levels seen during the bear market following the 2000 dot-com bubble burst. The market may be positioning for a potential short squeeze, where widespread short covering could trigger a sharp, rapid surge in the short term.