A looming short squeeze for bank stocks? Maybe!

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WAY OUT OF FAVOR: A highly enjoyable short squeeze in bank stocks might be just around the corner! Fund managers surveyed by Bank of America say that the market’s second-most crowded trade right now is short banks.

And when those managers say that “short banks” is a crowded trade, they aren’t kidding. Short interest in the S&P Regional Banking ETF lately comes to 92% of shares outstanding, up from 74% a week ago, Bloomberg reports.

Once bank stocks finally do start to recover, I can’t say it won’t be entertaining to watch the investors holding those short positions all move to cover them at once.