Stock-Market Rally Costs Bears $120 Billion

Investors have been ramping up bets against stocks—and they are getting burned.

Total short interest in the U.S. market topped $1 trillion this month, hitting the highest level since April 2022, according to data from S3 Partners. That is up from $863 billion at the start of the year and represents about 5% of all shares that are available to trade.

Short sellers borrow shares and then sell them, hoping to buy them back at a lower price later and pocket the difference. They have added to their bearish wagers in recent weeks, while the S&P 500 climbed to a 14-month high. The index is up 14% in 2023 and 5% in June alone.

That rally has been punishing: Short sellers have incurred roughly $120 billion in mark-to-market losses this year, including $72 billion in the first half of June, according to S3.

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