Here are 10 US stocks investors are betting against right now

Not all actions will be popular, but some actions will be much more unpopular than others at some point.

Currently, some US stocks are not popular with investors. This lack of popularity can be reflected in the number of people who bypass a business. Read on to find out exactly what short selling means and what stocks investors are betting against right now.

What does it mean to sell stocks short?

Short selling investments is a slightly complex process. But the main point you need to know is that this is a way to bet against an action. Short sellers borrow a security and sell it, hoping to buy it back later for less money. So if you think a stock’s price is going to go down, selling short would mean making money if it goes down in value.

However, this way of investing is a dangerous game. Because even if you make money if the stock goes down, you lose money if it goes up. When buying stocks, the maximum you can lose is 100% of your initial investment. But since stocks can go up over 100%, your downside potential is unlimited if you sell short.

Nonetheless, this strategy of betting against certain stocks gives us a good overview of which stocks are not in favor.

What are the 10 most shorted US stocks right now?

According to MarketWatch data, these are the top ten stocks that currently have the top selling short stocks in America:

Does this mean that these stocks are bad investments?

Not necessarily. Sometimes short selling can create a self-fulfilling prophecy. When investors see that a stock is sold short, they may lose confidence and decide to sell their investment. Others may simply choose not to buy shares of that company if they don’t already own any.

Usually, there is a reason why people short sell and bet against the companies. But often it’s more of a short-term game. The immediate future of a business may be bleak, but that doesn’t mean the business won’t recover and perform well later.

How should investors use this information?

It’s interesting to see which stocks are in disgrace right now. However, this unpopularity can sometimes offer great opportunities to buy stocks in companies that may have a lot of room for growth.

If a stock is heavily overdrawn, it is not a death sentence for the company. So, you may be able to find absolute bargains in those areas which have been overlooked by impatient investors. When you are recovering investments this way, it is always worth using a stock ISA account to ensure that you pay no tax on large gains.

Remember, whether you choose popular or unpopular investments, the gains are never guaranteed. You can take out less than what you put in, so always do your research carefully. If you need more help understanding the markets, be sure to check out our comprehensive guide to stock trading.

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