Home > Business > Short sellers lost $5.5 billion so far in November. Here are the trades that hurt the most

Short sellers lost $5.5 billion so far in November. Here are the trades that hurt the most

111 Views

It has so far been a bruising November for those investors betting against cyclically oriented sectors that have been hobbled due to the spread of a coronavirus and social-distancing measures.

The pain for short sellers, who use leverage to bet that the value of an asset will fall, intensified at the start of this week after an upbeat update on a vaccine candidate from Pfizer
PFE,
-0.46%

and partner BioNTech
BNTX,
-2.93%

on Monday sent Wall Street scrambling into beaten-down stocks like travel and leisure and out of technology-related investments.

The moves resulted in a broad-market surge, which particularly benefited small-capitalization stocks and assets considered to be undervalued by some metric.

Indeed, the small-cap focused Russell 2000 index
RUT,
-0.00%

is up a stunning 5.2% so far this week, pushing it to trade at its first record in about two years, while the tech-heavy Nasdaq Composite Index
COMP,
+2.01%

is down 1.1% thus far on the week, despite a nearly 2% rally on Wednesday. That marks the widest margin of outperformance between the Nasdaq Composite and the Russell on record dating back to 1986, Dow Jones Market Data said.

Meanwhile, value-oriented investments are outperforming growth, those investments that tend to grow earnings and profit faster than others over time, at least briefly breaking a decadelong trend of outperformance by growths assets that tend to reside in the tech and internet categories.

Read: Stock market rally due for ‘pause’ as rotation from growth to value hits an ‘extreme’

So far this week, the iShares S&P 500 Value ETF
IVE,
-0.31%

was up 5.2%, while its growth counterpart, the iShares S&P 500 Growth ETF
IVW,
+1.41%
,
was down 0.3% over the same period.

And momentum-oriented trades, bets on stocks that are expected to rise because they have in the past, were down 2.4% this week, as measured by the iShares MSCI USA Momentum Factor ETF
MTUM,
+2.03%
.

“In a sign of the potential of a post-COVID rotation, [Monday] was the biggest single day spread between Momentum and Value factor performance in the 28 year history of our data,” noted analysts at Evercore ISI in a Tuesday report.

All that seismic movement resulted in short sellers registering paper losses of approximately $5.5 billion since Nov. 1, according to a data provider Ortex Analytics.

Here’s a list of the companies stocks that they say inflicted the most pain on short sellers:

Company

Short paper profit/loss $

Carnival Corporation
CCL,
-3.10%

-$520,645,038

Expedia Group
EXPE,
-2.48%
-$382,521,909

Booking Holdings
BKNG,
-0.37%
-$345,380,994

Royal Caribbean Group
RCL,
-3.86%
-$320,378,441

Visa Inc.
V,
-0.28%
-$316,980,481

American Airlines
AAL,
-2.74%
-$274,828,946

Wynn Resorts
WYNN,
-5.12%
-$253,785,998

Norwegian Cruise Line Holdings Ltd.
NCLH,
-2.98%
-$251,891,345

Boeing Co.
BA,
-3.46%
-$242,611,684

Walt Disney Co.
DIS,
-3.01%
-$236,193,825

Source: Ortex Analytics 

Of course, there were trades that benefited short sellers:

Company

Short paper profit/loss $

Zoom Video Communications
ZM,
+9.92%
$999,668,166

Wayfair
W,
+3.72%
936,782,953

Tesla
TSLA,
+1.65%
$460,179,958

Teladoc Health
TDOC,
+5.86%
$457,657,390

Sea Ltd.
SE,
+8.05%
$449,411,262

Alibaba Group Holding
BABA,
-0.33%
$448,493,764

Amazon.com
AMZN,
+3.37%
$420,741,075

Netflix
NFLX,
+2.19%
$416,490,778

Peloton Interactive
PTON,
+0.95%
$375,821,804

Square
SQ,
+6.64%
$364,371,882

It’s still unclear if the resurgence of value will hold, tech stocks were making a comeback Wednesday while the Dow Jones Industrial Average
DJIA,
-0.07%

and Russell 2000 were both trading lower on the session.

Source link

TAGS , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.