Benzinga·2025-12-10 16:42Core Viewpoint - The article discusses the current landscape of heavily shorted stocks, highlighting the reasons traders engage in short selling and the potential for short squeezes as investment opportunities [2][3][4]. Summary by Sections Heavily Shorted Stocks - Stocks become heavily shorted when experienced traders and institutional investors believe the company is fundamentally overvalued, anticipating a price decline [2]. - Short sellers borrow shares, sell them at high prices, and aim to repurchase them at lower prices for profit, indicating a strong conviction about the company's risks [3]. Current Market Data - As of December 10, 2025, the top 10 most shorted stocks with market caps above $2 billion and free floats above 5 million are listed, ranked by short interest percentage [5]. - The most heavily shorted stock is Lucid Group, Inc. (NASDAQ: LCID) with a short interest of 52.70%, followed by Avis Budget Group, Inc. (NASDAQ: CAR) at 51.53% and Choice Hotels International, Inc. (NYSE: CHH) at 49.05% [6][7]. Market Characteristics - Heavily shorted stocks often reflect a battleground between negative fundamentals and speculative trading, where short squeezes can lead to significant, rapid gains but also come with high risk and volatility [8]. - Monitoring short interest can help identify potential short squeeze candidates, although timing such trades is challenging [8].