With the latest short interest figures for the end of August being released on Tuesday, we wanted to provide an update to our list of most heavily shorted stocks.  Within the S&P 1500 as a whole, there are currently 17 stocks that have more than 40% of the free-floating shares sold short.  Topping the list in the most recent update is Applied Optoelectronics (AAOI).  You may recall a couple of months ago that we highlighted how well AAOI had performed even though it had more than half of its float sold short.  Ironically, just after many shorts covered their bets, the stock cratered.  Now, after the fact, the shorts are piling back in the name, pushing short interest to over 70% of its float.  That’s higher than it ever got before the fall!

So far this month, shares of AAOI are just barely up, but most of the other most heavily shorted stocks are up a lot more.  In fact, the average performance of the 17 stocks listed so far this month was a gain of 10.31% through Wednesday’s close.  That average is a bit skewed by the 50%+ gain (yes, 50%!) in RH, but even on a median basis, the stock listed are up over 5% MTD compared to a gain of 1.1% for the S&P 1500 as a whole.  Furthermore, only two of the stocks listed are down this month, and neither is down more than 1%.

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