Short Seller Hedge Funds Rack Up $43B Loss In Recent Market Rally
Portfolio Pulse from Neil Dennis
Hedge fund short sellers have incurred losses of $43 billion due to the recent equity market rally, with the S&P 500 on track for its best month since July 2022. Data from S3 Partners indicates these losses occurred after positive U.S. inflation data. Tesla, Apple, and Intel were among the most unprofitable shorts. The SPDR S&P 500 ETF (SPY) has risen nearly 11% since October 27. Other significant losses for short sellers included positions in Carnival Corporation and Blackstone Group.
November 22, 2023 | 5:15 pm
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Apple's stock was also a costly short for hedge funds, with nearly $484 million in losses.
Apple's stock, being among the most unprofitable shorts, suggests that short sellers are facing pressure. This could result in a short-term uptick in Apple's stock price as short positions are covered.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 85
POSITIVE IMPACT
Blackstone Group shorts resulted in $269 million in losses for hedge funds.
Blackstone Group's stock has been a costly short for hedge funds, and the market rally could lead to a short-term positive impact on its stock price as short positions are unwound.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Carnival Corporation, a popular short, cost hedge fund short sellers around $240 million.
Carnival Corporation's position as a heavily shorted stock and the recent market rally suggest a potential short-term positive impact on its stock price due to short covering.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
Intel's short positions resulted in hedge funds losing nearly $484 million.
Intel, being one of the most unprofitable shorts, indicates that short sellers may be compelled to cover their positions, potentially causing a short-term rise in Intel's stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF (SPY) has seen an 11% increase since October 27, reflecting the broader market rally.
The SPY ETF's rise is directly correlated with the S&P 500's performance, and the recent market rally has had a positive impact on its value. This trend is likely to continue in the short term if market optimism persists.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 95
POSITIVE IMPACT
Tesla was among the most unprofitable shorts for hedge funds, with losses of $909 million.
Tesla's position as a heavily shorted stock and the recent market rally have likely led to a significant squeeze, causing short sellers to incur substantial losses. This could lead to a short-term positive impact on Tesla's stock price as short sellers may need to cover their positions.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90