THE DATA IS THE NEWS

S3 Partners

  • ETFsS3 Research

    Weekly ETF Activity as of 3-25-20

    by S3 Partners

    ETF short trading activity can provide insight into regional, index, sector and product-type hedging and Alpha based investing behavior. We follow over 3,500 domestic ETFs with a total short interest of $164 billion in our Black App and Blacklight SaaS platform.

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  • S3 Research

    Short Squeeze Candidates

    by S3 Partners

    With the markets down over -20%, prior to today’s trading, you’d be hard pressed to find losing short side trades. Only 3.5% of the 12.6 thousand short positions that we track are in the red since February 19th, and there are only six stocks with mark-to-market losses over -$100 million.

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  • S3 Research

    Profit Driven Short Covering

    by S3 Partners

    A Short Squeeze is a widely known reason for short sellers to close out (buy to cover) their short positions when they incur large mark-to-market losses and\or stock borrow rates spike, but the other side of the coin is closing out a short position in order to realize mark-to-market gains. With the domestic stock markets down over 20% in 2020, the vast majority of short trades are “in the money” and diligent traders are preparing exit strategies for their profitable short positions when the markets begin to trend upwards.

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  • ETFsS3 Research

    Post Feb 19 Short Activity

    by S3 Partners

    Overall domestic equity and ADR short interest has declined significantly, along with the markets, since February 19th. Total short interest has declined from $958.8 billion to $656.1 billion in just a month. Short interest has decreased by -32% as the S&P 500 and Nasdaq have declined by -29%.

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  • ETFsS3 Research

    ETF Borrow Costs Rising

    by S3 Partners

    Investors and portfolio managers who turned to derivative products, such as options and swaps, to try and hedge their long exposure have been shocked to see premiums explode as delta and gamma volatility surged. Many of these investors and portfolio managers turned to the ETF market in order to create hedges and Alpha plays in this volatile market. Unfortunately, as we were able to see in our S3 Black App screening tool, the cost to short ETFs has also increased significantly.

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  • S3 Research

    Short Winners & Losers

    by S3 Partners

    From February 24th to March 3rd short sellers were extremely active as the S&P 500 fell -10.02% and the Nasdaq fell -9.32%. We saw +$14.58 billion of additional broad short selling in the market with 62% of the actively shorted stocks (those with over $50 million of short interest) seeing additional short selling.

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  • S3 Research

    Domestic ETF Activity

    by S3 Partners

    ETF short selling was very active over the last two weeks as Coronavirus fears sparked a meltdown across the entire market. We track short selling activity in over 2,500 domestically traded ETFs with short interest of $161 billion. Over the last two weeks we saw +$6.2 billion of additional net short selling in ETFs, an increase of just over +4.0%. The mega-shorts in the ETF sector held their spots in the ETF league tables, with the top seven most shorted ETFs holding onto their positions. But spots 8 to 20 saw a lot of movement as short sellers adjusted their hedges and looked for alpha in different sectors.

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  • S3 ResearchSquare

    Square Shorts Covering Ahead of Earnings

    by S3 Partners

    Square Inc (SQ US) is the second largest short in the Data Processing & Outsourced Services Sector and has been a popular short this year. Shares shorted have increased by +2.71 million shares, +$217 million, in 2020 even as its stock price rose by 28.21%. But that short activity occurred in January when shares shorted increased by +3.46 million, +$277 million. In February, shares shorted decreased by -752 thousand shares, -$60 million. Short sellers have been actively trimming their short exposure since February 5th, covering -2.50 million shares, -$201 million as SQ’s stock price rose 2.50%.

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  • CannabisS3 Research

    Cannabis Shorts Up $237 million on Cowen Downgrades

    by S3 Partners

    Cowen Analyst Vivien Azer downgraded several cannabis stocks including Aurora Cannabis (ACB US\ACB CN) and Tilray Inc (TLRY US) which helped push cannabis sector stocks down twice as far as the general market. The top 20 shorts in our cannabis portfolio are down -6.76% in midday trading with the U.S. S&P 500 down only -3.22% and the Canadian TSX Composite down -1.64%.

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