Tags: short | sellers | rally | stock

Short Sellers Left With Short End of Stick Amid Market's Rally

By    |   Friday, 23 August 2013 07:59 AM EDT

The stock market's bull run this year hasn't been at all friendly to short sellers.

The 100 most heavily shorted stocks in the Russell 3000 index are rising far more than the average of all stocks in the index, according to a Wall Street Journal analysis of data provided by S&P Capital IQ.

The most heavily shorted stocks are determined by the percentage of total shares outstanding that had been shorted at the beginning of the year.

Editor’s Note:
Buy These 4 Stocks Before 399% Stock Market Rally!

The most-shorted 100 stocks soared by an average of 33.8 percent this year through Aug. 16, compared with 18.3 percent for all stocks in the index, The Journal reports. That gap is wider than at any time in the last decade.

Hedge funds are responsible for much of the shorting of stocks.

"If you just took hedge funds' long positions, you would have pretty stellar performance," Greg Dowling of Fund Evaluation Group tells The Journal. "It's on the short side where guys have been getting killed."

Some money managers see similarities to 1999, when technology stocks kept soaring despite lofty valuations.

"It's actually more painful now than it was in '99," short seller Andrew Left of Citron Research tells The Journal.

Short-selling overall has waned since the financial crisis ended in 2009, Will Duff Gordon, research director at Markit, an information service firm, tells Institutional Investor.

"Short selling is difficult, competitive," he says. "You pay to borrow, you have infinite downside. It's not been easy."

Editor’s Note: Buy These 4 Stocks Before 399% Stock Market Rally!

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InvestingAnalysis
The stock market's bull run this year hasn't been at all friendly to short sellers. The 100 most heavily shorted stocks in the Russell 3000 index are rising far more than the average of all stocks in the index, according to a Wall Street Journal analysis of data provided by S&P Capital IQ.
short,sellers,rally,stock
264
2013-59-23
Friday, 23 August 2013 07:59 AM
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