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Find new investment opportunities based on Market Sentiment Indicator. Manage watchlist risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
Most Trending
Most Trending
Short selling is back on Wall Street, and it rewards those who bet against banks, but on the other hand causes a backlash.
In recent weeks, there has been criticism that the traders are scaring bank customers, causing them to withdraw their deposits at once. Lawyers representing the banking industry last week called on regulators to ban short sales of shares of financial companies.
Short sales of financial stocks jumped about 11% in April, without significantly affecting stock prices, according to stock data provider Ortex. In May the situation was reversed and the amount of short sales decreased, and shares of regional banks decreased by about 10%.
Porter Collins, co-founder of Seawolf Capital, said the fund opened up short positions on banks like First Republic last year when interest rates rose, driving down the prices of the bonds the banks held. "It was simply a mathematical equation."
The largest number of stocks sold short was highest for First Republic and PacWest Bancorp, more than 15%, according to S&P Market Intelligence. Short volume also jumped for several others, including Metropolitan Bank, Bank of Hawaii, Zions Bancorporation, Customers Bancorp and Southstate Bank. Still, the financial sector was one of the industries with the fewest shorts at the end of April, an average of 1.7%, or half the volume of shorting technology stocks, according to S&P data.
Now that monetary policy is tightening, investors increasingly want shorts to cushion themselves against volatility caused by geopolitical, macroeconomic and climate change factors around the world. Hedge funds lost a modest 4% last year, according to Hedge Fund Research, while the S&P 500 fell 18%.
Investors pumped about $9 billion in new money into all hedge funds in the first three months of 2023, after pulling out about $75 billion from April to December in 2022, and total outflows reached about $160 billion from 2016 to 2021.
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Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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