Short selling activity is a criterion that is not so often taken into consideration in the investment world. However, even though short-sellers can not be considered market makers, their activity may have a point, and it may show that a decline in price is not far away. For some stocks, which have a high short percentage of float (tradable shares), the price can climb as shorters are covering their positions.
An increased demand together with a reduced supply of shares, forces individuals, who hold short positions, to buy shares while the price increases rapidly, a situation known as a "short squeeze." In a "short squeeze" speculators can earn good money by capturing short-term price movements. We would like to present five of the most massively shorted stocks in the S&P 500 Index. These companies have experienced the highest level of short trading as a percentage of float. Make a visit on the website of Insider Monkey for more details on the most shorted stocks in the S&P 500 index.
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