More traders than ever are betting against Virgin Galactic amid the stock's record surge

• In the last 30 days, Virgin Galactic stock shorted has increased by 3.4 million shares, a 25% jump, according to data from financial-analytics firm S3 Partners.
• The spike in short-selling comes amid a record run for the space tourism company - the stock has gained 223% for the year through Wednesday's close.
• Virgin Galactic short-sellers are down $440 million in mark-to-market losses this year, according to S3 data.
• Still, there's no sign that a "short squeeze" is coming, according to Ihor Dusaniwsky of S3 Partners.
• Watch Virgin Galactic trade live on Markets Insider.
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There's a new popular stock to short on Wall Street, and it's out of this world.

In the last 30 days, traders have shorted an additional 3.4 million Virgin Galactic shares, an increase of more than 25%, according to data from financial-analytics firm S3 Partners.

It's the largest amount of shares shorted for the stock, Ihor Dusaniwsky, the managing director of predictive analytics, told Markets Insider in an email Thursday. "Short interest, much like Virgin Galactic's VSS Unity spaceship, has never seen such heights before," he said.

The increase in traders betting against Sir Richard Branson's space tourism company comes amid a record rally for the stock. This year, Virgin Galactic has gained more than 223% through Wednesday's close.

That means that even though traders are rushing to bet against the buzzy space company, their potential losses are growing. So far in 2020, Virgin Galactic short-sellers are down $440 million in mark-to-market losses, according to S3 data. The frenzied short-selling has also driven up the stock's borrow fee, which could put additional stress on traders banking on shares falling. Virgin Galactic's stock borrow fee is nearly 20% and continues to rise, Dusaniwsky said.

Still, Virgin Galactic short-sellers haven't caved to the pressure. "Although all the signs point to a short squeeze, we do not see shorts capitulating and exiting their positions at this time," Dusaniwsky said.

But that could change if the stock continues to gain attention from short-sellers. "While there is no short squeeze at the moment, there is a very good chance shorts may start covering as even higher stock borrow rates make a losing trade too painful to hold onto," Dusaniwsky said.

There might be some relief on the horizon for Virgin Galactic short-sellers. After initially spiking as much as 12% in early trading Thursday, the stock fell as much as 5% after Morgan Stanley said shares are "overdue" for a correction.