Reuters File Photo: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, USA on March 19, 2021. Reuters / Brendon McDermide / File photo
(Reuters) – Institutional investors are holding their bearish bets on the shortest stocks on Wall Street in response to an increase in appetite for risky bets, according to Wanda (NASDAQ 🙂 research.
Short-sellers are frustrated investors who borrow stocks, aim to cover, and aim to buy back their returns when prices fall.
Large numbers of stocks were rallying on Wednesday and short sellers were forced to drop bearish bets to reduce their losses, known as a brief squeeze.
“We believe that institutional investors were forced to cover their shorts, perhaps because they were de-grossing or because they feared that the recurrence of a sense of risk might cause pain in their short book.”
According to the latest data from S3 Partners, a number of top U.S. traded stocks, based on the percentage of shares sold short, are rallying recently.
Top short, Big 5 Sporting Goods, whose 41.5% float has sold short, has risen nearly 4% in the last three sessions but was down 0.5% on Thursday. Altimeter Growth Corporation, whose %% shares were short, rose %% in sharp trading volumes on Thursday.
Blink Charging Company (NASDAQ :), which has 36% float shorts, fell 2.5% on Thursday after rising 8% in the previous three sessions, while Workhorse Group, with 35% float shorts, fell 2.5% after rising on Thursday in the last two sessions. 10.6%.
Meanwhile, Wall Street’s three main indicators were up more than 1% on Thursday after hitting the field on Wednesday.
Highly abbreviated names have also found high retail references on Reddit’s Wall StreetBet, Wanda strategists say, commenting on such stocks on the forum was very close to the daily average in September and October.
But retail investors had nothing to do with short-term pressure, strategists said, as individual purchases of these stocks on Wednesday were much smaller than most days in September and October.
On Wall StreetBet, an investor forum on Reddit.com, some commenters hinted Wednesday that it was a tough session for bearish investors.
“There’s a bear crying somewhere …” wrote a member of the Wall StreetBates.
Vanda argued that if short-term pressure on stocks continued, “it could eventually persuade retail investors to abandon crypto investments” because they say “the rotation between these two asset classes is very common.”
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