S&P 500 short interest nears 2010 high as bearish bets surge
Short interest in the S&P 500 has climbed to 3.7% of its free float, nearing its highest level since 2010, while the Russell 3000 saw short interest hit 6.1%. NYSE-listed equities reached a record short interest of 9.0% in late June, surpassing levels seen during the 2008 and 2020 crises. Short interest in the SPY ETF rose to 109.82 million shares, with a days-to-cover ratio of 1.71 days.
*this image is generated using AI for illustrative purposes only.
Short interest in the S&P 500 index has climbed to approximately 3.7% of its free float, nearing its highest level since 2010. Market commentator The Kobeissi Letter warned that conditions for a short-squeeze are rising as traders build heavy short positions against American equities. These elevated short levels across key benchmarks are creating significant potential for a rapid upward market rally.
Data from S3 Partners and Bloomberg highlights that bearish bets on US stocks are surging steadily across major equity indices. Short interest in the broad-market Russell 3000 index has reached approximately 6.1% of its free float, hovering near an all-time high as both metrics have climbed steadily since the start of 2025. Pessimistic sentiment is even more pronounced across the broader stock market, with short interest across all NYSE-listed equities expanding to a record 9.0% of shares outstanding in late June.
To put this figure into historical context, short interest peaked at roughly 5.0% during the 2008 Financial Crisis and about 6.0% during the 2020 COVID-19 pandemic. This places current bearish positioning far above past major crisis levels.
| Index / Market | Short Interest Level | Historical Context |
|---|---|---|
| S&P 500 | ~3.7% of free float | Near highest since 2010 |
| Russell 3000 | ~6.1% of free float | Near all-time high |
| NYSE-listed equities | 9.0% of shares outstanding | Record high (late June) |
| 2008 Financial Crisis Peak | ~5.0% | — |
| 2020 COVID-19 Peak | ~6.0% | — |
This macro trend is clearly visible in the flagship State Street SPDR S&P 500 ETF Trust (NYSE: SPY). Benzinga’s latest short interest report shows shorted shares in SPY rose from 102.34 million to 109.82 million during the settlement period ending June 30. With SPY closing at $748.28 as of Tuesday and registering an average daily volume of 64.37 million shares, the ETF carries a days-to-cover ratio of 1.71 days. This means short sellers would require nearly two full trading days to repurchase shares and close out their positions without sending the stock sharply higher, further amplifying the risks of a potential short squeeze.
The S&P 500 index has advanced 9.49% year-to-date. Similarly, the Nasdaq Composite index was up 11.20%, and the Dow Jones gained 7.94% YTD. The SPY and Invesco QQQ Trust ETF (NASDAQ: QQQ), which track the S&P 500 and Nasdaq 100 respectively, were higher in premarket on Wednesday.
What specific catalysts might trigger a short squeeze given the current elevated short interest levels?
How could a rapid market rally driven by short covering impact long-term investment strategies?
What risks do short sellers face if market sentiment shifts unexpectedly in the near term?
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