Short selling has been a major topic on Wall Street lately, with the focus mainly on the short interest of individual stocks. Below we highlight the US ETFs with the highest short interest as a percentage of shares outstanding as well as the ones with the highest short interest ratios.
The most heavily shorted ETFs have short interest numbers that well exceed their shares outstanding. The S&P Retail ETF (NYSEARCA:XRT) has a short interest figure that is more than 6 times its shares outstanding. This seems a bit out of whack to us.
As shown, the most heavily shorted ETFs come in the sectors and groups that are doing the best and doing the worst in this market. Financials, Consumer Discretionary and Energy ETFs make up the bulk of the list. The heavily traded USO (oil) ETF reportedly has 180% of its shares outstanding sold short.
The most recent short interest figures are from mid-July, which don't yet show the impact of the SEC's new short interest policies. While the short interest of individual stocks will most likely decrease, it will be interesting to see how the short interest of the ETFs below change.
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Below we highlight the US ETFs with the highest short interest ratios. This number represents how many days it would take to cover all of the shares shorted based on the ETF's average 30-day volume. Most of these ETFs have much lower daily volume than the ones in the table above, and this means short squeezes would be much bigger in these names.