11 replies to this topic

[Echo]

Everyone should recognize that the huge increase in "shorting" is in part due to the increased popularity of 130/30 or 1X0/X0 methods employed by fund managers to try to regain the disappearing alpha. Successful fund managers who are good at picking stocks with strength and go long with them, feel they can also successfully pick weak stocks and go 30% short with those, thereby increasing their alpha. After having a few short stocks get squeezed on them, many have spread the risk by shorting ETFs like IWM, SPY, DIA, or MDY. Of course, with such a move, out goes the hope of increasing their alpha. I believe that this is part of the explanation for the record short interest currently rather than a blatant bearish slant from a sentiment standpoint. As far as the relative popularity and volume of SDS vs SSO or QID vs QLD or TWM vs UWM, it is in large part due to the use of these instruments in retirement account where for the first time you can go short (or hedge) and be able to place stops and fine tune your trading rather than rely on EOD bear funds as in the past. Echo

[Rogerdodger]

I think the reason the short funds are getting attention is not because people are going fully short, they are rather long a basket of stocks and trading in and out of the short funds easily for hedging.

That's always been my guess.
There are tax reasons which should not be ignored.

As for the big block trades, bots like those.