Financial stock was the most shorted in April

The SPDR S&P 500 ETF also showed up on the list for the first time ever.

Capital One Financial (NYSE:COF), which recently received regulatory approvals to merge with Discover Financial (NYSE:DFS), was the most shorted stock in April, according to Hazeltree’s latest Shortside Crowdedness Report.

Hazeltree, a technology and data provider for the alternative asset management industry, ranks the most shorted stocks among some 700 hedge funds and asset managers, tracking some 15,000 stocks.

Capital One had the highest crowdedness score, which means it was shorted by the highest percentage of funds. The securities are graded on a scale of 1-99, and Capital One had a score of 99. The Capital One-Discover merger is slated to close on May 18, so that was likely the catalyst for the surge in shorting activity, as investors are betting that the stock price will decline post-merger.

It is also notable that an ETF, the SPDR S&P 500 ETF (NYSEARCA:SPY) was among the top 10 most shorted investments in April.

Shorting the S&P 500?

The SPDR S&P 500 ETF ranked eighth on the list of most shorted large-caps, with a score of 82. This suggests that hedge fund managers don’t see a lot of upside in the large-cap benchmark, likely due to the potential for a recession and the impact of tariffs.

“April kept short-sellers on edge as new tariffs took effect, triggering volatility and prompting investors to reassess fundamentals amid sharp market swings,” Tim Smith, managing director of Data Insights at Hazeltree, said. “We also observed the unexpected appearance of the SPDR S&P 500 ETF among the top 10 most crowded large-cap shorts—a reflection of its significant outflows over the past three months, despite its status as one of the most actively traded ETFs.”

Charter Communications (NASDAQ:CHTR) ranked second among large-caps in April with a score of 91, followed by MicroStrategy (NASDAQ:MSTR) at 88.

IBM, Super Micro Computer, and Chevron were next with scores of 85, while Live Nation, ON Semiconductor, and Dell Technologies round out the top 10 with scores of 79.

Super Micro Computer had the highest institutional supply utilization figure at 52.84% — a distinction it has held for the fifth straight month.

Institutional supply utilization represents the percentage of the institutional investors’ supply of a particular security that is being lent out. In other words, it is an indicator of how “hot” a security is in terms of the supply-demand dynamic.

In the mid-cap category, Murphy USA (NYSE:MUSA), an owner of gas stations, was the most shorted stock with a score of 99. Among small-caps, JetBlue Airways (NASDAQ:JBLU) was the most shorted for the second straight month. It also had a score of 99.