Boom time for short sellers
01 September 2015 London
Image: Shutterstock
Short sellers enjoyed the highest level of average short positions heading into the downturn in over 18 months, according to Markit.
The financial information provider noted that average short interest in the FTSE 100 index is up by more than a third since this time last year.
The market witnessed the largest selloff since 2011 as the FTSE 100 lost 4.6 percent in value on 24 August and closed at its lowest level since January 2013.
Short sellers were able to leverage the recent high in the average demand for borrowing across the index ahead of Monday’s slump.
Short interest reached 1.75 percent in the lead up to Monday’s selloff, which was just shy of the 18 month high achieved last week and reflects a 43 percent growth since the start of the year.
The most shorted firms were those with high exposure to commodities and emerging market risk.
Morrison’s, Sainsbury’s and Weir Group, which services oil, gas and mineral industries, were the top three most shorted and reflect the widespread negative market attitude towards natural resources and commodities.
Short sellers also targeted the FTSE 250 index and its constituents now have an average of 1.6 percent of shares out on loan, an 18 month high.
The financial information provider noted that average short interest in the FTSE 100 index is up by more than a third since this time last year.
The market witnessed the largest selloff since 2011 as the FTSE 100 lost 4.6 percent in value on 24 August and closed at its lowest level since January 2013.
Short sellers were able to leverage the recent high in the average demand for borrowing across the index ahead of Monday’s slump.
Short interest reached 1.75 percent in the lead up to Monday’s selloff, which was just shy of the 18 month high achieved last week and reflects a 43 percent growth since the start of the year.
The most shorted firms were those with high exposure to commodities and emerging market risk.
Morrison’s, Sainsbury’s and Weir Group, which services oil, gas and mineral industries, were the top three most shorted and reflect the widespread negative market attitude towards natural resources and commodities.
Short sellers also targeted the FTSE 250 index and its constituents now have an average of 1.6 percent of shares out on loan, an 18 month high.
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