Investors frequently monitor stocks exhibiting substantial short interest, as these securities can reveal conflicting market perspectives and potential trading opportunities. High short interest in a stock typically reflects a consensus among skilled traders and institutional investors who anticipate a decline in the company's stock price due to perceived fundamental weaknesses or overvaluation. Conversely, other market participants may interpret these situations as fertile ground for rapid upside gains should a short squeeze unfold.
A stock is classified as "heavily shorted" when a considerable portion of its publicly tradable shares have been sold short but not yet covered by those holding short positions. This phenomenon arises because short sellers, who are often professional and institutional investors, have identified what they regard as significant risks or overvaluation in the stock, prompting them to bet against its future performance.
To understand why a stock might become heavily shorted, it is essential to appreciate the rationale of short sellers. These market participants believe the company’s current share price does not reflect its true intrinsic value, often due to concerns about earnings prospects, debt levels, competitive positioning, or other fundamental issues. Consequently, they borrow shares to sell at the present market price, intending to repurchase them later at a lower price, thereby profiting from the expected decline.
While the presence of high short interest may highlight negative sentiment, it also sets the stage for potential volatility in the stock’s price. Should the stock experience an unexpected price increase, short sellers may rush to buy shares to close out their positions and limit losses. This surge in buying demand can accelerate the price appreciation, creating a feedback loop whereby price climbs further and more shorts are compelled to cover, a situation known as a short squeeze.
The mechanics of a short squeeze imply that stocks with significant short interest can exhibit unusually rapid and large price movements over a short timeframe. These dynamics make such stocks both intriguing and risky for different kinds of investors. On the one hand, bears may anticipate further downside, while bullish retail investors sometimes view these scenarios as opportunities for outsized returns, albeit accompanied by elevated risk.
As of December 29, 2025, an analysis of publicly available market data reveals the ten stocks with the highest short interest among those with market capitalizations exceeding $2 billion and freely tradable shares numbering at least 5 million. These rankings emphasize the percentage of shares currently sold short relative to the public float, highlighting where short sellers have concentrated their positions.
The top position is occupied by Lucid Group, Inc. (NASDAQ: LCID), which shows an outstanding short interest of 54.51%. Choice Hotels International, Inc. (NYSE: CHH) follows closely with a 50.20% short interest level. Avis Budget Group, Inc. (NASDAQ: CAR) ranks third at 48.80%, while Revolve Group, Inc. (NYSE: RVLV) reports a notable 43.14%.
Further down the list, Medical Properties Trust, Inc. (NYSE: MPW) shows 37.13% short interest, with MARA Holdings, Inc. (NASDAQ: MARA) at 36.23%. Hims & Hers Health, Inc. (NYSE: HIMS) features a 35.22% short interest rate, and TransMedics Group, Inc. (NASDAQ: TMDX) stands at 35.11%. Kohl’s Corporation (NYSE: KSS) and Northern Oil & Gas, Inc. (NYSE: NOG) round out the list with 34.27% and 33.27% respectively.
This data underscores that for each of these stocks, a significant proportion of their publicly available shares are being held in short positions. Such elevated short interest figures typically indicate the presence of potent negative convictions about the companies' prospects from market professionals.
It is crucial for investors contemplating positions in these firms to acknowledge that stocks with heavy short interest serve as battlegrounds wherein bearish fundamental assessments collide with speculative trading activity. The interplay can generate substantial price volatility, making financial outcomes difficult to predict.
Short squeezes, while capable of producing rapid and large gains, inherently carry heightened risks, including swift reversals and unpredictability in price behavior. Furthermore, while monitoring short interest levels can provide insights into potential squeeze candidates, identifying precise timing for such moves remains an intricate endeavor.
Comprehensive due diligence remains imperative before engaging with heavily shorted stocks. The elevated short interest commonly reflects deep-seated uncertainties and risks in the underlying businesses, factors that can exert sustained downward pressure or exacerbate price swings.
As of the data snapshot on December 29, 2025, the share prices for the highlighted companies varied broadly, with Lucid Group trading at $11.21, Avis Budget at $130.56, Choice Hotels at $96.80, Hims & Hers at $34.06, Kohl's at $20.81, MARA Holdings at $9.59, Medical Properties Trust at $5.08, Northern Oil & Gas at $21.80, Revolve Group at $30.77, and TransMedics Group at $123.83.
While this overview offers a snapshot of market sentiment and the scale of short positioning in prominent stocks, investors should recognize that the situation is dynamic and closely tied to evolving company fundamentals, market conditions, and trading behaviors.