MSTR is primarily a Bitcoin play, highly correlated with Bitcoin’s price movements. As Bitcoin recently reached an all-time high above $100K, MSTR gained 3% on the news. However, this gain is modest compared to MSTR’s daily volatility, which remains very high.

MSTR is the most volatile stock in the Nasdaq 100, with a volatility score of 100.

The stock is also a short interest story, with 12% of its float shorted, though this is down from a high of 36%. Shorts short MSTR on the way up in reversal strategy.

Some short sellers are buying Bitcoin and shorting MSTR as an arbitrage strategy.

MSTR has risen 575% YTD, contributing to its inclusion in the index, and its market cap is now $100 billion.

SuperMicro (SMCI)

MSTR replaced SMCI, which is down 70% since February. SMCI has a much smaller market cap of $20 billion and similar volatility at 100. SMCI is down 8% today.

SMCI is also a short interest story, with 15% of its float shorted, and only 75% of the stock is floated. SMCI is a real company with actual earnings, and its shorts are primarily momentum traders betting on further declines.

Palantir (PLTR):

PLTR is up 325% YTD and is added.

The stock’s short interest as a percentage of float has decreased, with only 3.73% of the float shorted.

Unlike other story stocks, Palantir’s short interest doesn’t follow a clear pattern based on stock price movements. While long-term trends exist, short activity does not directly correlate with stock price changes.

Moderna (MRNA):

MRNA has been removed from the Nasdaq 100.

The stock has struggled recently, with a significant drop in value, and its short interest as a percentage of float has doubled in recent months.

Short sellers have increased their positions as MRNA continues to underperform.

MRNA has 11.5% of its float shorted, and its short interest notional has increased due to rising stock prices, as the overall notional value of short interest has grown faster than the decrease in shares shorted.

Axon (AXON):

AXON is up 146% YTD and has been added.

Despite the significant price increase, short interest remains steady. The shorts do not follow any clear pattern based on price movements.

Illumina (ILMN):

ILMN had a significant drop and subsequent recovery and is removed.

The stock’s short interest as a percentage of float remained stable until mid-August, when it almost doubled.

However, there is no discernible pattern in shorting behavior based on the stock’s price movements, either on the way up or down.

None of those added have an increase in short interest. Those deleted have an increase with shoring on the way down. The short interest may be a signal for additions deletion.

The Nasdaq 100 rebalance reflects broader market themes, including rising short interest as a signal for stock removals. To explore how short activity and volatility shape market opportunities, contact us for deeper insights.

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