Bespoke data shows betting against the shorts has been a big winning strategy

[Short Selling is refer to an investor or trader sells an asset that they do not own but instead have borrowed with the expectation that its price will decrease in the future.]
Abu Hanifah

The 100 most heavily shorted stocks of the largest 3,000 U.S. companies have seen a significant outperformance since Wall Street's April lows, according to data from Bespoke Investment Group, indicating that betting against the shorts has been a good way to make money.

The Bespoke update comes at a time when short squeezes saw a brief resurgence [https://seekingalpha.com/news/4470390-investors-are-bidding-up-a-new-batch-of-meme-stocks] in the form of renewed activity in meme stocks in July. The short-lived frenzy was sparked by investors trying to make a quick buck amid expensive U.S. stocks at record highs.

"The 100 most heavily shorted stocks in the Russell 3,000 are now up 66.5% since the 4/8 low versus 29% for all stocks and 14% for the 100 least shorted," Bespoke said last week on X (formerly Twitter).

See the chart Bespoke shared below:
[Russell 3000 shorts]
Bespoke Investment Group

The Russell 3,000 index tracks the performance of the largest 3,000 U.S. companies. The gauge is designed to represent about 98% of the investable U.S. equity market. It is operated by LSEG's FTSE Russell and was launched on January 1, 1984.

The index in turn is tracked by the iShares Russell 3000 ETF (NYSEARCA:IWV [https://seekingalpha.com/symbol/IWV]).

Here are some ETFs that track the benchmark S&P 500 index (SP500 [https://seekingalpha.com/symbol/SP500]): (NYSEARCA:SPY [https://seekingalpha.com/symbol/SPY]), (NYSEARCA:VOO [https://seekingalpha.com/symbol/VOO]), (NYSEARCA:IVV [https://seekingalpha.com/symbol/IVV]), (NYSEARCA:RSP [https://seekingalpha.com/symbol/RSP]), (NYSEARCA:SSO [https://seekingalpha.com/symbol/SSO]), (NYSEARCA:UPRO [https://seekingalpha.com/symbol/UPRO]), (NYSEARCA:SH [https://seekingalpha.com/symbol/SH]), (NYSEARCA:SDS [https://seekingalpha.com/symbol/SDS]), and (NYSEARCA:SPXU [https://seekingalpha.com/symbol/SPXU]).

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