You're not special anymore
15 June 2016 London
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A dramatic drop off in the short selling volume of Russell 3000 constituents is negatively affecting securities lending revenues, according to financial data provider Markit.
According to Markit, the average short interest among the index’s constituents, which is responsible for over 95 percent of the US shorting activity by volume, has dropped by 10 percent from the highs seen in April.
Furthermore, as well as falling shorting volumes, the number of securities lending trades garnering a specials fee, anything over 100 basis points (bps), as also declining.
Markit’s data notes that over 10.2 percent of the Russell 3000 constituents traded special in April, but that has fallen to 8.7 percent of the index’s current constituents now meeting the special criteria.
Energy sector firms, which regularly feature in hot stocks lists, are a prime example of this trend with the number of stocks earning special fees falling from 33 to 29 since the start of 2016.
According to Markit, the average short interest among the index’s constituents, which is responsible for over 95 percent of the US shorting activity by volume, has dropped by 10 percent from the highs seen in April.
Furthermore, as well as falling shorting volumes, the number of securities lending trades garnering a specials fee, anything over 100 basis points (bps), as also declining.
Markit’s data notes that over 10.2 percent of the Russell 3000 constituents traded special in April, but that has fallen to 8.7 percent of the index’s current constituents now meeting the special criteria.
Energy sector firms, which regularly feature in hot stocks lists, are a prime example of this trend with the number of stocks earning special fees falling from 33 to 29 since the start of 2016.
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