Traders betting against Alphabet have lost more than $1 billion this year

Betting against Google's parent company, Alphabet, has been a losing proposition this year.

Short sellers have taken a $1.1 billion bath on their bearish wagers since the start of 2017 as the stock has surged roughly 23%, according to data provided by S3 Partners, a financial analytics firm.

But that futility hasn't prompted short speculators to throw in the towel heading into Alphabet's second-quarter earnings report, due after Monday's closing bell. In fact, they've added $100 million to positions in the past week.

On a longer-term basis, cumulative short interest -a measure of bets that share prices will drop - has actually climbed 39% to $1.5 billion year-to-date, even as Alphabet's share price has rallied.

In other words, short sellers have stuck to their guns.

The increased shorting activity is a natural reaction to a stock that's done so well. As part of the elite group know as FANG - along with Facebook, Amazon and Netflix - the company has been a crucial component of one of the year's most popular trades.

And based on recent history, it's a savvy move to brace for fluctuations heading into earnings, since Alphabet has moved an average of 5% in the day following its last eight reports, on an absolute basis. That includes a 16% gain after the company's second-quarter 2015 results.

Alphabet fell 0.2% to $992.11 at 11:08 a.m. ET on Monday.

Get the latest Google stock price here.