These 13 stocks are spring-loaded for a surge as it gets too expensive to short them

Reuters / Brendan McDermid

• Borrowing costs for some of the market's most-shorted stocks are skyrocketing and creating a situation where short sellers are at risk of getting squeezed, according to a new study from financial technology and analytics firm S3 Partners.
• When short sellers close out of their bearish positions, it pushes shares higher.
• Listed below are 13 stocks that look poised to soar as it becomes increasingly expensive to continue shorting them.
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Some of the most-shorted stocks in the market are becoming to expensive to bet against, putting short sellers at risk of getting "squeezed."

For context, short sellers bet against stocks by borrowing shares for a fee at a given price. They're looking to buy back the stock at a lower price if it falls. But short sellers can get squeezed when those borrowing costs get too high, forcing them to close their positions early. That, in turn, pushes shares higher.

Financial technology and analytics firm S3 Partners put together a list of stocks that are seeing a spike in borrowing costs. Since continuing to bet against those shares is getting more expensive, S3 says it's increasingly likely that short sellers will have to close their positions.

"If stock borrow rates have already risen significantly, and the borrow is getting more expensive, shorts may begin to rethink their short selling thesis," S3 Partners said in a note on Friday. "Stock loan is a supply/demand market. If supply gets tight or demand spikes borrow fees are bound to go up."

Listed below are 13 stocks that could be set to surge because its becoming too expensive to bet against them. They're ranked in increasing order of how much their borrowing costs have increased over the past two weeks.