LONDON U.S. equity investors are more bullishly positioned than at any time in the last two years, figures from Data Explorers show, following a sharp market rally since September.
Investors currently have 10.8 times as many long positions as short positions -- bets on falling prices -- in the United States, the highest since the ratio was calculated two years ago, according to the data.
The data uses stock on loan as a proxy for short-selling and measures this against the value of institutional longs that are made available to lend through securities lending programs.
The data also shows that the ratios of long positions to shorts in Asia and Europe are also high relative to their recent past.
Investors have ridden an 18 percent rise in the S&P 500 index since the end of August.
Equity hedge funds have gained around 8 percent in the three months to November, according to Hedge Fund Research, more than making up losses incurred earlier in the year.
However, hedge funds that focus on short-selling have lost around 13 percent in the three months to November as markets have rallied.
Data Explorers' figures show there were 9.9 times as many longs as shorts in Europe, while the ratio fell as low as 5.2 in May. Since then, the FTSEurofirst 500 has risen nearly 18 percent.
In Asia, longs are at 11.1 times shorts, their highest since February. The ratio reached a peak over the last two years at 11.7 in January.
The value of stock on loan across Europe is $176 billion while as much as $274 billion was out on loan in May, despite the fact that the market's value was lower then.
Part of this increase can be explained by the seasonal pick-up in dividend activity as stocks are borrowed for dividend tax arbitrage trading, Data Explorers said.
The data suggests hedge funds' net exposures -- their long positions relative to their shorts -- may be high.
However, their gross exposures -- or the combination of long and short bets -- are likely to have been reduced in recent weeks as managers try to avoid bets that would damage their performance this year and affect their bonuses, industry executives say.
"There's been a reduction in risk," said Hans Hufschmid, chief executive of hedge fund service provider GlobeOp, in a recent interview. "Funds have had a decent year and some of the guys are locking in profits, I'm sure. It's a natural phenomenon."
Shares that are seeing particularly high levels of short interest in Europe include Provident Financial, which has 16 percent of stock out on loan, while Vestas Wind has 12 percent and Banco Populare has 10 percent, the data showed.