Stock market shorts are getting their faces ripped off – Business Insider

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Terminator wax statue face rip offArnold Schwarzenegger as the Terminator, Madame Tussauds wax museum. It is a major tourist attraction in London Shutterstock / Anton Ivanov

With all three major US indexes hovering near record highs, it’s been a great time to be a stock trader.

Unless you’re a short seller.

In fact, those who bet on share price declines haven’t felt this much pain in almost two years, with a Goldman Sachs basket of the most-shorted stocks in the Russell 3000 sitting at the highest since August 2015. 

In other words, the most popular short targets are doing exactly the opposite of what speculators want.

But that doesn’t mean the bears are throwing in the towel. They’re actually getting bolder. The proportion of shares borrowed to sell on US exchanges is currently 3.8%, up from the start of the year. Still, there has been some capitulation since the first quarter of 2016, when short sellers pushed the measure up to 4.35%, according to Bloomberg data.

On the other end of the spectrum, stock bulls are still out in full force. Hedge funds and large speculators are positioned close to the most bullish since September, data compiled by Commodity Futures Trading Commission show. The measure, which calculates a weekly net position, is more than four times its five-year average.

Wall Street is similarly optimistic. Strategists see the S&P 500 grinding 1.4% higher from Tuesday’s close through year-end, according to a 19-person survey conducted by Bloomberg. 

GS most shortedBusiness Insider / Andy Kiersz, data from Bloomberg