Analysis: Short positions in US stocks have reached multi-year highs, the highest level since 2012.

According to Mars Finance, as of May 26th, short positions in US stocks have reached multi-year highs. The median short position in S&P 500 stocks has risen to 3.0% of market capitalization, the highest level since 2012, double the level during the 2020 pandemic. In comparison, during the 2008 financial crisis, the median short position in S&P 500 stocks was 3.8%. Furthermore, among the 10% of stocks with the heaviest short positions in the S&P 500, short positions have risen to 8.0% of market capitalization, the highest level since 2018. Both of these indicators are even higher than during the bear market following the bursting of the dot-com bubble in 2000. The market may be preparing for a potential short squeeze, with a large-scale short liquidation potentially triggering a sharp and rapid surge in the short term.