Traders targeting heavily shorted stocks are looking to play one of two sides: betting on a company's downfall or hunting for a short squeeze.
Here is a breakdown of why these stocks attract so much attention and a look at the current market landscape.
- LCID stock is heavily shorted. See the chart and price action here.
What Makes A Stock Heavily Shorted?
The primary reason a stock becomes heavily shorted is that a large number of experienced traders and institutional investors believe the company is fundamentally overvalued and that its price will fall.
The short sellers are betting that the company faces significant risks—such as poor earnings, a failing business model or industry headwinds—that will eventually drive the stock price down.
On the flip side, retail traders often view high short interest as a coiled spring. If the stock price starts to rise, it can trigger a short squeeze, accelerating the upward move.
The Mechanics Of A Short Squeeze
A short squeeze is a volatile feedback loop that can lead to explosive gains in a very short window.
It begins when a stock's price rises unexpectedly, forcing short sellers to frantically buy shares back to cover their positions.
The forced buying creates a sudden spike in demand, which pushes the price even higher, trapping more short sellers in the feedback loop.
The volatility of a short squeeze can lead to returns that far exceed typical stock movements in a very short time frame.
Top 10 Most Shorted Stocks
Here are the most heavily shorted stocks (with market caps above $2 billion and free floats above 5 million) as of Feb. 13, according to data from Benzinga Pro.
In the table below, stocks are ranked by short interest — the total number of shares sold short and not yet covered, expressed as a percentage of shares available for public trading.
| Company Name & Ticker | Short Interest (%) [Feb. 13, 2026] |
| Choice Hotels International, Inc. (NYSE:CHH) | 57.32% |
| Lucid Group, Inc. (NASDAQ:LCID) | 51.78% |
| Avis Budget Group, Inc. (NASDAQ:CAR) | 48.72% |
| CleanSpark, Inc. (NASDAQ:CLSK) | 44.39% |
| Hims & Hers Health, Inc. (NYSE:HIMS) | 41.71% |
| ImmunityBio, Inc. (NASDAQ:IBRX) | 40.85% |
| MARA Holdings, Inc. (NASDAQ:MARA) | 39.90% |
| TransMedics Group, Inc. (NASDAQ:TMDX) | 39.60% |
| Kohl's Corp. (NYSE:KSS) | 34.43% |
| Sphere Entertainment Co. (NYSE:SPHR) | 33.98% |
Reminders:
- Highly shorted stocks are battlegrounds where negative fundamentals meet speculative trading.
- Short squeezes can deliver huge, fast gains, but at very high risk and volatility.
- Monitoring the short interest leaderboard can help identify which stocks might be the next short squeeze, but timing such trades remains extremely challenging.
- Always conduct due diligence, as the volatility often reflects deep underlying risks and business uncertainty.
Photo: Shutterstock
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