Screenshot via Tesla

Tesla short-sellers are down $1.25 billion in mark-to-market losses after Monday's nearly 10% rally, according to a Monday note from financial-analytics firm S3 Partners.

"With 2020 losses mounting, we should see a continuation and probably an acceleration of Tesla's multi-month short squeeze," wrote Ihor Dusaniwsky, the managing director of predictive analytics at S3.

Since 2016, when S3 started calculating short-side data, Tesla shorts are down about $11.44 billion in net-of-financing mark-to-market losses.

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Tesla's been on a tear in 2020, and it's meant pain for short-sellers.

Traders who have bet against the Elon Musk-led automaker are down as much as $1.25 billion in mark-to-market losses after Monday, according to data from financial-analytics firm S3 Partners. That day, Tesla broke above $500 per share for the first time ever and continued to gain, ending the day up early 10% at $524.86 per share.

"With 2020 losses mounting, we should see a continuation and probably an acceleration of Tesla's multi-month short squeeze," Ihor Dusaniwsky, the managing director of predictive analytics at S3, wrote in a Monday note. Those with lower profit and loss pain thresholds will likely be the first to cover, or exit the short trade, he added.

Tesla shorts have been feeling pain since June 2019, when shares rebounded from an annual low and gained through the rest of the year. Traders shorting Tesla did not have a profitable 2019, and were down roughly $2.9 billion in mark-to-market losses for the year, according to S3 data.

This year isn't going much better for Tesla shorts. "In less than two weeks, they've nearly matched last year's losses," Dusaniwsky wrote.

Tesla's stock gains have been recently fueled by solid 2019 vehicle delivery numbers and optimism around the new Gigafactory in Shanghai. In addition, a number of Wall Street analysts have boosted their target prices for Tesla — the Street high is now $612, which implies that the stock could surge an additional 17% from Monday's close.

Even though Tesla is one of the most popular shorts —second only to Apple in the domestic market, according to S3 data— it's been a rough one for traders. Since 2016, when S3 started calculating short side data, Tesla shorts are down about $11.44 billion in net-of-financing mark-to-market losses, Dusaniwsky wrote.

"The recent rally may be the final tipping point for the mother of all short squeezes," Dusaniwsky said. "If shorts begin to cover in size, we expect the Tesla rally to get turbo charged to even higher levels."

Tesla has gained roughly 25% year-to-date through Monday's close.

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