With the markets down over -20%, prior to today’s trading, you’d be hard pressed to find losing short side trades. Only 3.5% of the 12.6 thousand short positions that we track are in the red since February 19th, and there are only six stocks with mark-to-market losses over -$100 million.
While these losses and the relative cheap stock borrow rates preclude me from saying these are all immediate short squeeze candidates there are several that may get squeezed sooner rather than later. Zoom Video Communications (ZM) and health related stocks Teledoc Health (TDOC), Regeneron Pharma (REGN), Moderna (MRNA), Gilead Sciences (GILD) and Forty Seven Inc (FTSV) all have losses over-10% and a sharp market upturn may force shorts out of their positions.
Profits are calculated from February 19th to March 22nd. The Mark-to-Market P\L% is simply the MTM P\L$ divided by the Avg Short Int.
When the markets begin their rebound, we can expect this list to grow and the number of short squeezes to increase accordingly. Market volatility and the associated sizable and sudden price moves will quickly turn short winners into losers and attentive short sellers will attempt to close out positions before their profits are wiped out or losses become considerable. The stocks on this list may be the first ones to feel the squeeze.
Want deeper insight into the above analysis?
Contact: Ihor.Dusaniwsky@S3Partners.com
Managing Director Predictive Analytics, S3 Partners, LLC
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