which says short sellers of GameStop and AMC realized losses of almost a billion dollars. With these two having pretty much become meme stocks, why would any sane institutional investor keep shorting the two?
Shorting is supposed to be a way to hedge your bets regarding an asset you believe to be overvalued (note the word "believe"), by essentially saying, "loan me 100 shares; I'm going to sell them; I'll buy them back when the price halves (or in one week, whichever comes first), and give those repurchased shares back to you then"
It's slightly more complicated than that - but it's the basic gist
These institutional investors believe GameStop and AMC to be overvalued.
They also believe that the price should correct within the window of time they have for their shorting (1 week, 1 month, whatever).
But, so far, it appears that the price correction hasn't come - which hurts shorters
Reminder there were days where GME was doing more volume than SPY. That wasn't redditors.
You have it wrong.
To "sit on" losses mean that the losses have not been realized.