Short sellers lose $3.5B as Robinhood soars nearly 300% in 2025

[Trading Platform Robinhood Fined 65 Million By Securities And Exchange Commission]
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Short sellers betting against Robinhood Markets (NASDAQ:HOOD [https://seekingalpha.com/symbol/HOOD]) have racked up more than $3.5 billion in losses this year, as the stock has surged nearly 300% year-to-date, including a 12% rally last Monday.

Despite growing bearish bets, HOOD's relentless rise has placed it firmly in short squeeze risk territory, according to S3 Partners [https://www.s3partners.com/articles/robinhood-rallies-short-sellers-lose].

The stock's breakout has been fueled by bullish momentum around service expansion, improving fundamentals, increasing user engagement, market share gains, and speculation over inclusion in the S&P 500.

Retail enthusiasm remains high across forums and trading chatrooms, though institutional ownership has edged lower—now at 21% active and 55% passive.

At the same time, short interest has steadily climbed throughout 2025, even as the stock price rose. S3’s short interest analytics show HOOD’s short squeeze score spiked above 70 on multiple occasions, although these levels didn’t result in a full-blown squeeze.

The pattern suggests a mix of conviction shorts and possible index-related trading ahead of potential S&P 500 inclusion.

HOOD’s last two earnings reports [https://seekingalpha.com/news/4474768-robinhood-q2-earnings-revenue-beat-consensus-as-crypto-equities-options-trading-climb] missed expectations, adding fuel to the bearish thesis, which includes concerns about its stretched price-to-earnings ratio, valuation disconnects, rising competition, and potential analyst downgrades.

Still, sell-side sentiment [https://seekingalpha.com/symbol/HOOD/ratings/sell-side-ratings] remains broadly positive, with most analysts maintaining bullish outlooks. Despite a short interest level of just 5% of float, HOOD is still considered high risk for a squeeze due to its steep upward trajectory and growing options activity.

Notably, implied volatility has been rising, often a sign that traders are buying calls to chase upside—or buying puts to hedge long positions—both indicative of increasing uncertainty or disbelief in the rally.

HOOD also trades more like a tech stock than a financial one, with a beta of 2.7 to the S&P 500 and 2.0 to the Nasdaq-100. That sector correlation, combined with declining volatility amid rising prices, adds further complexity for traders managing exposure or hedging risk.

For short sellers, the situation remains precarious. As long as HOOD maintains its momentum, pressure is likely to build—especially if price action continues to outpace fundamentals.

MORE ON ROBINHOOD MARKETS

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