If you want to understand what professional investors really think about a stock, look at short interest. It's one thing to say you're bearish on a company in an interview. It's another thing entirely to borrow shares, sell them, and bet real money that the price will fall.

Heavily shorted stocks attract two very different types of traders. First, there are the short sellers themselves, who believe a company is fundamentally overvalued and are willing to put money behind that conviction. Then there are the contrarians—often retail traders—who see high short interest as ammunition for a potential short squeeze, where forced buying can send shares rocketing upward in a matter of hours or days.

Both groups have good reasons to pay attention. Let's break down what makes these stocks so controversial, and which ones are currently sitting in the hot seat.

Why Stocks Get Heavily Shorted

When a stock shows up on a "most shorted" list, it means experienced traders and institutional investors have looked at the company and decided it's overpriced. They're not just pessimistic—they're actively betting on failure.

Here's how it works: Short sellers borrow shares, sell them immediately at today's price, and plan to buy them back later at a lower price. The difference between the selling price and the buying price is their profit. It's straightforward when it works, but it can be devastating when it doesn't.

The flip side is what makes heavily shorted stocks so volatile. High short interest creates the conditions for a short squeeze—that beautiful, terrifying phenomenon where rising prices force short sellers to buy back shares to limit their losses. This buying creates more upward pressure, which forces more short sellers to cover, which pushes the price even higher. It's a feedback loop that can turn a 10% gain into a 50% gain in hours.

That volatility is exactly what makes these stocks attractive to aggressive traders looking for massive returns in compressed time frames. But make no mistake: the same volatility that creates opportunity also reflects genuine business uncertainty and risk.

The Ten Most Shorted Stocks

These rankings come from data as of Nov. 26, filtered for companies with market caps above $2 billion and free floats above 5 million shares. The percentage shown represents short interest—the total number of shares sold short as a percentage of shares available for public trading.

The Wendy's Co. (WEN) leads the pack with a stunning 55.36% short interest. That means more than half of the fast-food chain's available shares are currently borrowed and bet against—a level of skepticism that's hard to overstate.

Cambium Networks Corp. (CMBM) follows closely at 50.03%, while electric vehicle maker Lucid Group (LCID) sits at 48.99%. Semiconductor company Wolfspeed (WOLF) rounds out the stocks above 48% at 48.18%.

The rest of the list includes Hertz Global Holdings (HTZ) at 44.67%, Sable Offshore Corp. (SOC) at 38.59%, Replimune Group (REPL) at 38.39%, Hims & Hers Health (HIMS) at 38.12%, aTyr Pharma (ATYR) at 37.92%, and Intellia Therapeutics (NTLA) at 37.85%.

What This Means for Traders

Heavily shorted stocks are battlegrounds. On one side, you have institutional investors with substantial research budgets who believe these companies are headed for trouble. On the other side, you have traders looking to exploit short squeeze mechanics for quick profits.

Short squeezes can absolutely deliver huge, fast gains. We've all seen the stories. But they come with extreme risk and volatility, and timing them correctly is notoriously difficult. You're essentially trying to predict when enough short sellers will panic simultaneously to create that upward spiral.

Monitoring short interest can help identify potential squeeze candidates, but it doesn't tell you when—or if—a squeeze will happen. Sometimes heavily shorted stocks are just heavily shorted for good reasons, and the price keeps falling.

If you're considering trading any of these stocks, remember that high short interest usually reflects deep underlying business risks and uncertainty. The same factors that make professional investors want to bet against these companies are the reasons the volatility exists in the first place. Do your homework, understand what you're getting into, and never invest more than you can afford to lose in these high-stakes situations.