Short selling, or betting that a stock will go down, is making a comeback on Wall Street. According to market data firm S3 Partners, short positions across US and Canadian equities surged 4% in June to $2.39 trillion, a record in data going back to 2010.

Why the Increase in Short Selling?

The increase was driven entirely by new short selling, with about $98 billion of additional shares shorted. Short interest for the median S&P 500 stock has surged to 3.2% of market capitalization, the highest level since the 2008 financial crisis.

This surge in short interest coincides with a bearish sentiment creeping into the AI trade. Buzzy semiconductor stocks that surged earlier this year have struggled to maintain their momentum, with the popular iShares Semiconductor index falling nearly 20% from its early-June peak.

What Does This Mean for Investors?

For investors, this means that the party in their 401(k) could be winding down. When you buy a stock, you have a defined loss and an unlimited potential gain. In shorting, it’s the other way around. If you’re holding a short position, you better have done your homework, as losses can theoretically go on forever.

Original reporting: El Paso News (HLL/CB) — read the source article.