Wall Street’s Short Sellers Lose $195 Billion in 2023 amid Market Rally

Market rally in 2023 had cost short sellers nearly $195 billion, while betting against regional banks and vaccine makers were among the few bright spots, according to data from S3 Partners LLC.

The stock market’s big rally last year that saw S&P 500 gaining 25% and Nasdaq Composite jumping 40% was a nightmare for short sellers, especially those who wagered against big-cap tech stocks, resulting in major losses. Tesla was the main factor with $12.2 billion in paper losses in 2023 for short sellers after the share price of the EV producer doubled last year. Nvidia was second to give $11.2 billion paper losses to traders.

Some short sellers were able to book profit from the collapse of regional banks such as First Republic Bank that was the most profitable with $1.6 billion of profits. Vaccine producers such as Moderna Inc., was the second to offer $1.1 billion of earnings for short sellers from a 45% plummet in stock prices last year.

Despite those gains, the data from S3 showed that short sellers finished 2023 with paper losses of nearly $195 billion, which was about two-third of $300 billion they gained from the market rout in 2022.