Most Shorted Major Stocks of January 2019
Amid what appears like an unstoppable relief rally as earnings season begins in earnest, it’s intriguing to view the performance of the most disliked stocks out there. Here, we bring you the most shorted major stocks of January 2019.
Most Shorted Major Stocks
Yes, Tesla’s there, as you might expect. But there are also others that you may not have thought of. Campbell Soup (the company behind Pepperidge Farm cookies, V8 juice, and of course, good old-fashioned tomato soup)? Match Group (owner of Match.com and Tinder)? Sirius XM Holdings (the satellite radio company)?
The chart above shows five of the most shorted major stocks (all large-caps), with their price and one-year performance on the y-axis to the right. Here is a quick list of these most shorted major stocks of January:
Clearly, it doesn’t make too much of a difference that these stocks are heavily shorted. Some, like Match Group, have done extremely well over the past year. Others, like Campbell Soup, not so much.
The Short Squeeze
One thing that should be kept in mind with any heavily-shorted stock is the potential for what’s called a “short squeeze.” With any stock that sees a lot of short activity, short traders can sometimes get trapped. This means that any significant and unexpected rise in the stock can result in traders having to cover their short positions in order to avoid losing too severely. This can result in additional and substantial upward pressure on the stock. When there is a short squeeze like this, stocks can and will rally sharply.
As with any type of investing, be wary, but especially when considering a short position.
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Senior Market Analyst at The Technicals
A veteran global macro trader/analyst, Bart focuses on major market moves in currencies, commodities, fixed income, and global equity indexes. Bart stresses inter-market correlations and dynamics while keeping a close eye on risk. He has published countless market analysis pieces and has been a guest expert for a variety of major financial media. Contact Bart