Traders betting against runaway US stocks are blaming indiscriminate retail investors for their worst year of returns in half a decade.
A basket of the 250 US stocks most popular with short sellers has surged 57 per cent this year, hurting the traders betting on those shares’ decline, according to calculations by data group S3 Partners.
That marks the best run for heavily shorted US stocks since 2020, when the basket gained 85 per cent. Bitcoin miner Terawulf and car rental business Hertz, which fell into bankruptcy in 2021, have soared 155 per cent and 50 per cent, respectively, this year. Both have more than 40 per cent of their shares on loan. Short sellers typically borrow shares in order to sell them, before buying them back later to profit from a decline.