Financhill

Most Shorted Stocks

Per Page: 24
Company
Days to Cover
% Shares Short
COIN
Coinbase Global
3.12 19.34%
Last Price:
71.42
Short Interest:
43.89M
% Float:
27.45%
View Chart
KMX
CarMax
5.42 13.81%
Last Price:
76.16
Short Interest:
21.82M
% Float:
15.57%
View Chart
AAL
American Airlines Group
2.89 13.77%
Last Price:
16.96
Short Interest:
89.51M
% Float:
15.52%
View Chart
PARA
Paramount Global
7.84 13.63%
Last Price:
23.35
Short Interest:
88.45M
% Float:
15.36%
View Chart
WOLF
Wolfspeed
6.59 12.04%
Last Price:
82.94
Short Interest:
14.95M
% Float:
18.34%
View Chart
CHRW
C.H. Robinson Worldwide
9.66 11.82%
Last Price:
105.22
Short Interest:
13.91M
% Float:
16.89%
View Chart
DKS
Dick's Sporting Goods
6.83 11.58%
Last Price:
134.32
Short Interest:
9.66M
% Float:
23.65%
View Chart
FND
Floor & Decor Holdings
7.44 11.57%
Last Price:
100.85
Short Interest:
12.27M
% Float:
13.25%
View Chart
ETSY
Etsy
4.82 10.51%
Last Price:
145.03
Short Interest:
13.21M
% Float:
11.91%
View Chart
WSO
Watsco
15.20 10.08%
Last Price:
296.87
Short Interest:
3.91M
% Float:
15.01%
View Chart
PEN
Penumbra
12.79 9.86%
Last Price:
267.10
Short Interest:
3.75M
% Float:
12.14%
View Chart
CCL
Carnival
2.76 9.65%
Last Price:
12.19
Short Interest:
125.39M
% Float:
14.43%
View Chart
LCID
Lucid Group
5.32 9.02%
Last Price:
11.57
Short Interest:
164.89M
% Float:
22.13%
View Chart
POOL
Pool
8.46 8.76%
Last Price:
391.83
Short Interest:
3.42M
% Float:
11.76%
View Chart
BILL
Bill.com Holdings
5.11 8.57%
Last Price:
101.07
Short Interest:
9.05M
% Float:
10.04%
View Chart
TROW
T. Rowe Price Group
10.13 8.53%
Last Price:
123.83
Short Interest:
19.06M
% Float:
8.68%
View Chart
CDAY
Ceridian HCM Holding
12.90 8.3%
Last Price:
74.60
Short Interest:
12.75M
% Float:
12.63%
View Chart
CLF
Cleveland-Cliffs
3.13 8.26%
Last Price:
20.17
Short Interest:
42.56M
% Float:
8.38%
View Chart
Z
Zillow Group
3.97 8.05%
Last Price:
46.36
Short Interest:
19.14M
View Chart
RCL
Royal Caribbean Group
5.01 7.7%
Last Price:
74.01
Short Interest:
19.64M
% Float:
10.31%
View Chart
RGEN
Repligen
8.38 7.33%
Last Price:
193.85
Short Interest:
4.07M
% Float:
7.36%
View Chart
EXAS
Exact Sciences
3.48 7.23%
Last Price:
68.57
Short Interest:
12.85M
% Float:
8.16%
View Chart
U
Unity Software
2.98 7.07%
Last Price:
36.72
Short Interest:
28.48M
% Float:
9.05%
View Chart
SRPT
Sarepta Therapeutics
6.80 7.03%
Last Price:
120.79
Short Interest:
6.17M
% Float:
7.36%
View Chart
No results

Your Chance To Invest In The Green Energy Revolution!

Everyone knows that they can make money by purchasing stocks at low prices and waiting for their values to increase. At that point, you can sell your stocks to earn a tidy profit.

Fewer people know that money can be made by betting on stocks falling. Short selling is a strategy that takes advantage of declining stocks. If you feel intimidated by this option, short selling for dummies will introduce you to popular strategies and how you can take advantage of fluctuations in the stock market.

What Is Short Selling Stock?

Short selling is a pretty advanced form of trading. If you don’t have experience investing conventionally, you should probably stay away from it.

Once you feel confident to dip your toes into short selling stock, it makes sense to follow the rules established by short selling for dummies. It's probably best to go slow at the beginning so you can keep the risks as low as possible.

To begin, let’s break short selling stock into a few steps that you can follow easily:

  1. Borrow a company’s shares whose value you believe will fall soon from your brokerage firm and sell them immediately.
  2. Pay interest on the borrowed amount to the brokerage you borrowed from. They don’t let you borrow for free!
  3. When share prices fall as expected, buy back your position. Someone else is willing to buy the shares from you at the current price, which lets you pocket some cash immediately. Or, wait for the stock’s value to keep falling, which gives you a chance to buy shares at even lower prices.
  4. Return the shares to the brokerage and keep the difference between the previous and current values. Minus the fees and interest, of course.
That’s the basic blueprint you can follow.

Now, let’s get into how you can accomplish these steps.

How Do You Borrow a Stock to Short Sell?

Assuming that you already have an account set up at a brokerage firm, you can start borrowing stocks to short sell fairly easily. For example, a heavily traded stock like Apple could be shorted quite easily.

You need to start by opening a “margin account” with your brokerage. A margin account lets you borrow against the investments in your portfolio.

How much can you borrow? The amount differs depending on your brokerage. Generally, you can expect to borrow up to 50% of your portfolio’s value.

Keep in mind that the more you borrow, the more you could lose. If you can’t afford to lose 50% of your portfolio, it’s probably not a good idea to risk that much.

Some benefits of margin accounts include:

  • Letting you borrow stocks that you want to short.
  • Giving you access to funds when your brokerage isn’t open.
  • Making it possible for you to buy trending stocks outside of your brokerage’s hours.
  • Allowing you to enter options trades, such as credit spreads.
Remember that the brokerage will charge some kind of fee for borrowing money. This can’t get repeated enough. Brokerages don’t give you the option to create margin accounts just so you can generate profits. They also let members create margin accounts so the brokerages can make more money.

How Long Can You Short a Stock?

Technically, you can short a stock for as long as you want. In practice, your brokerage may have limits that define how long you can borrow the stocks you want to short.

Even if your brokerage doesn’t enforce limits, it may continue to charge you interest on the borrowed stock. Eventually, the interest charge will offset any profits that you make from the short sell. You may even lose money if your interest charges get high enough.

If your brokerage lets you borrow a stock to short indefinitely, take a close look at how much money you stand to earn or lose. You get to make the decision, so it’s unfair to call the brokerage’s action “predatory.” You may, however, let the brokerage take advantage of your situation.

What Is a Short Selling Example?

All of this talk about short selling can sound a little confusing. Providing a real short selling example should make it easier for you to understand precisely how the investment strategy works.

Let’s take a step-by-step look at an example:

  1. Find an overvalued stock with a value you believe will crash soon. In this example, let’s use Boeing Co (BA) at the end of 2019. For decades, Boeing’s stock never broke the $100 barrier. In mid-2013, though, the stop stock’s value began an unprecedented climb. The value peaked at nearly $418 on February 2019. Plenty of investors couldn’t believe that such a mediocre stock had reached such a high price. In fact, many of them short sold the stock. By March 20, 2020, the price had dipped below $100, again, partially because of the COVID-19 pandemic.
  2. Place a short trade with your broker by borrowing the stock you want to bet against. Before you accept the exchange, check the interest rate and related fees. Depending on the amounts, you may decide that you’re not interested in short selling with your brokerage. At this point, you can forget about short selling or find a brokerage with better rates.
  3. If you are aiming to make money from a quick share price decline, short sell the stock and buy it back on a dip. You probably won’t earn much, but you could pick up more money than you spent on brokerage fees and interest.
  4. Wait for the share price to fall more if you plan to earn more from a bigger decline. Depending on how well you time your sell, you could make a significant amount of money from the short sell. With Boeing, you could have borrowed the stock on February 14, 2020, when it was worth $340.49. On March 20, 2020, you sell the stock when it reaches $95. With a 50% margin requirement and no dividends, you will make about $144 per share minus the brokerage’s margin interest percentage. 
Obviously, there are a lot of moving parts. And there are never any guarantees. In this case, though, short selling 100 Boeing shares would have earned you $14,400 minus interest, fees and commissions. 

Can I Short Sell a Stock I Own?

Yes, you can short sell stock that you own. This scenario is called “short selling against the box.”

You will need to call your brokerage and have them move your shares.

Most investors, however, do not use this strategy to earn money. Instead, they use it to avoid taxes. The Securities and Exchange Commission got wise to the strategy about 10 years ago. To combat tax-evaders, the SEC issued a rule that prevents you from short selling a stop that falls more than 10% in 24 hours.

If you want to want to short sell a stock that you own, and the value has fallen more than 10% within a day, you will need to open a margin account.

Avoid fines from the SEC and other regulatory agencies by contacting a financial advisor. Ignorance of the law will not protect you from fines and/or even possible jail time. A respected financial advisor should know how you can protect your money without breaking the law.

Short Selling Explained: Pros and Cons

Investors wouldn’t short sell stocks if they didn’t have the potential to benefit. All investments, though, come with benefits and disadvantages. Make sure you understand the pros and cons before you decide to short sell a stock.

Short Selling Stock Pros

Some of the short selling stock pros include:
  • You can add diversity to your portfolio, making it possible for you to earn money even when the stock market doesn’t perform well.
  • Bull markets often lead investors into false sense of security. Short selling can protect you from that mentality.
  • You can potentially make a lot of money without putting much at risk.

Short Selling Stock Cons

Some of the short selling stock cons include:
  • You take a big risk on trusting your instinct that a stock value will fall soon.
  • When too many people short sell stocks, it can drive the overall stock market down.
  • It’s very difficult to decide when to close a short sale to get the maximum payout.
  • You always have to pay your brokerage an upfront fee, whether you earn or lose money.
Whether it makes sense to try short selling depends on your financial situation and portfolio. If you can take some risk and you believe that a stock’s value will crash soon, you might as well short sell the stock.

If you don’t have a robust portfolio that can withstand some loss, though, tread carefully with short selling. It could put you behind your investment goals.

Short Selling vs Puts Buying: Pros and Cons

Short selling and puts buying create opportunities for you to make money from falling stock prices. They work slightly differently, though, so you should know the difference before you choose an option.

The Definition of Short Selling

This has been covered above, so let’s keep it simple. Short selling involves borrowing a stock from your brokerage, selling the stocks, and hoping that the values will fall so you can purchase them at an even lower price.

The Definition of Puts Buying

When buying put options, you pay a premium to retain the right to sell a stock as its value declines.

You are not, however, required to sell the stock. Ideally, the share reaches a specific value, and the trader chooses to sell. If the share’s value rebounds, then the put buyer can walk away without losing more than the premium paid for the put option.

Pros and Cons of Puts Buying vs Short Selling

  • Short selling often has higher margin requirements than buy buying.
  • Put buying lets you walk away from a deal that doesn’t go your way.
  • Buying puts helps to limit a trader's potential loss.
  • Short selling lets investors borrow money against their portfolios instead of spending cash.
The outcome of short selling and puts buying can go either way. Many people feel that put buying has lower risk because they never have to sell the stocks. They do, however, have to spend money retaining the right to sell the stock.

You will need to study your portfolio, talk to an investment advisor, and compare your brokerage options before you determine whether you want to use short selling or puts buying.

Is Short Selling Risky?

Yes. Short selling is fairly risky. Of course, all investment options are risky. Plenty of experts, however, tell their clients to avoid short selling because it involves a higher risk than other investment options.

Before getting into the risks of short selling, let’s acknowledge that many people have generated income from the strategy. In March 2020, Bloomberg reported than short sellers had made more than $50 billion during the COVID-19 sell-off.

Some of these investors made money because they believed that the emergence of COVID-19 in China would spread around the world, causing a recession. Others were short selling stocks because they could not believe that the market could sustain itself for long. The stock market looked healthy, but the economy was struggling. They shorted stocks because they did not believe this situation could last.

The short sellers who saw conflict between the economy and the stock market may have detected similarities between the real estate bubble and the economy that took place in 2008. During that recession, a handful of smart investors made billions of dollars betting against the market. Adam McKay even directed a feature film, “The Big Short,” starring Christian Bale, Steve, Carell, and Brad Pitt, among others.

Despite the benefits that a small number of professional traders have earned, short selling is risky for average investors. If you want to try short selling, start small and build on your success. Don’t jump in with expectations that you will take advantage of a stumbling stock market. The market has proven itself unpredictable.

Best Stocks to Sell Short

If you choose to short sell stocks, you need to know which options to focus on.

Stocks With Very Bad Financials

A company with very bad financials usually owes a lot of money and may struggle to grow profits as revenues rise. They may not even make profits. They probably don’t even break even.

They may, however, have outside funding that keeps them afloat. Funding puts investors in an interesting predicament. For example, Uber is an unprofitable company. It doesn’t make any money. Still, it has a valuation above $50 billion.

Be cautious when evaluating a company’s financials. The numbers don’t always indicate how stock values will move.

Stocks With Negative Sentiment

Some companies make good products, but they constantly rub consumers the wrong way. Can a company’s stock value remain high when people dislike it?

When you see a lot of negative stories about a company, consider adding it to your list of stocks to short sell.

PG&E Corporation stands out as a good option in August 2020 because people are upset that the company keeps cutting power to California households. Many people also dislike the company because a court decided that PG&E couldn’t get sued for the role its equipment played in deadly wildfires.

Companies Suspected of Fraudulent Accounting

It’s difficult to suspect a company of fraudulent accounting until the SEC gets involved. The SEC uncovers fraud every year, but that doesn’t mean casual investors have access to information that they can use to choose short sell options.

You may pick up on some clues, though, by paying close attention to the news. Citron Research is famous for laser targeting companies that may be suspected of engaging in fraudulent behavior.

The bottom line is short selling gives you a different way to earn money from the stock market. Know your risks and potential rewards before you get involved.

Investing News

What Is The Highest Paying Dividend Stock In The Dow?

What Is The Highest Paying Dividend Stock In The Dow?

Verizon (NYSE:VZ) has recently experienced a substantial uptick in its capital expenditures as the firm endeavors to upgrade its aging infrastructure and maintain a competitive edge in a notoriously unforgiving sector. Unfortunately, this increase in spending has reduced the company’s free cash flow, potentially putting its dividend at risk. But, despite the significant investments plowed [&

Read Article

1 Growth Stock To Hold Forever

1 Growth Stock To Hold Forever

The travel industry struggled through the worst of the pandemic years, and all of the major hotel chains, airlines, and cruise ship companies lost money. A lot of money. Many boutique hotels, small travel agencies, and businesses dependent on tourism were forced to close permanently, and travel-related tech companies saw dramatic drops in use. Now […]

Read Article

How Much Does It Cost To Operate a Pool?

How Much Does It Cost To Operate a Pool?

How Much Does It Cost To Operate a Pool? Installing a swimming pool can add value to home values and operating a swimming pool can add significant value businesses like hotels, gyms, and health spas. Installing a pool in an investment property, however, might not give you the results you want. Before you decide whether […]

Read Article

1 Ultra High Yield Dividend Healthcare Stock To Buy

1 Ultra High Yield Dividend Healthcare Stock To Buy

High Yield Dividend Healthcare Stock To Buy: With an aging population expecting ever more sophisticated advancements in curative technologies and treatment, Medical Properties Trust is well poised to benefit from the rising expansion of the healthcare industry.   Indeed, the sector is overflowing with an abundance of high-value companies today, as increasing demand for senior […]

Read Article

3 Stocks Gone Parabolic in 2023

3 Stocks Gone Parabolic in 2023

In late 2020 and early 2021, retail investors inspired by social media hype poured into a handful of low-performing stocks hoping to secure large gains. In many cases, the hypothesis behind these stocks was based on squeezing overextended short positions taken on by hedge funds.   While the meme stocks, as these assets came to […]

Read Article

How Does The Stock Market Perform After a Down Year?

How Does The Stock Market Perform After a Down Year?

It was an awful year for the stock market in 2022. Inflationary pressures and rising interest rates coincided with the beginning of a brutal war in Ukraine, bringing about a seemingly unprecedented set of headwinds that wreaked havoc for investors across the globe.   Indeed, the S&P 500 closed out the year 18% down, with […]

Read Article

More Investing News

The #1 Stock Analysis Tool to Make Smarter Buy and Sell Decisions

Get started at Financhill, the #1 investment research platform that is your one-stop shop for finding the best trade ideas today.

  • Top Rated Stock Ideas
    Financhill Stock Score is a proprietary stock rating engine that independently evaluates every company based on fundamental, technical, and sentiment criteria so you can find the highest rated stocks in the S&P 500, NASDAQ and NYSE.
  • Best Stock Tools Platform
    Whether you are looking for the best blue chip stocks, top dividend stocks, most shorted stocks, cheapest stocks today, highest dividend stocks or best stocks under $50, Financhill has got you covered and has so much more.
  • Stocks Set To Soar & Crash
    Financhill spots seasonal patterns in thousands of stocks so you can easily screen for the best stocks at this time of year. Want to know what stocks could rise 11% over the next 7 weeks with 91% accuracy based on past history? Our Seasonality Screener will surface the hottest stocks right now.
Learn More

Featured in:

CNBC
The Wall Street Journal
Chicago Tribune
Barrons
MSN
Reuters