Everyone who keeps sharing these short interest charts is missing the flows behind them. Most shops are not taking outright short bets. This is another effort to ease margin requirements across the street: banks providing balance sheet for more speculative bets are asking clients to post more short exposure. The sequence on the street looks like this: HF manager: “I want more margin.” Bank: “Things look risky in public AI bets, and we’re already lending a lot against private AI bets. For some clients, we’ll extend more financing, but only if they add more short exposure to improve their collateral scores.” HF manager: “Okay, I’ll short more stock against my main bet.” That is how you end up with short exposures that look astronomically high while many end users remain heavily long tech. The additional shorts are supporting the financing of their main bets. Which also tells the bigger story on why raw equity financing rates haven’t blown out the way they did ahead of the big SpaceX IPO in June, despite the fact that lending is slowing.