Betting against the FTSE 100 netted traders £418 million in September. These are the top 5 most and least profitable short sells last month

  • Short sellers made a profit of £418 million across London's entire FTSE 100 index in September, according to recent analysis from Ortex Analytics, a global financial analytics company.
  • This marked a turnaround frm August, when short sellers lost £420 million. Short selling typically has a high risk/reward ratio, an investor can secure significant profits, but also end up with infinite losses, if they are not careful.
  • "At the time, we predicted that the pendulum may swing back the other way in September and that's exactly what we've seen, as short sellers continue to profit from the uncertainty surrounding the pandemic," Peter Hillerberg, co-founder of Ortex Analytics, said in a press release.
  • Ortex Analytics lists the 5 most profitable and 5 least profitable short sells for September.
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Short sellers made a profit of £418 million across the entire FTSE 100 index in September, according to recent analysis from Ortex Analytics, a global financial analytics company.

The FTSE 100 was one of the worst-performing major indices in Europe in September, as a surge in cases of COVID-19 and tighter restrictions on movement, coupled with renewed concern over Brexit, hit UK assets harder than most regional markets. The index fell 2%, compared with a 1.6% fall in the euro zone Stoxx 50.

The FTSE tracks the 100 largest companies on the London Stock Exchange with the highest market capitalization. Overall, short sellers made a profit on 53 out of the 100 companies in the index.

Some of the FTSE's heavyweight stocks are those that have been worst-hit by the economic fallout of the pandemic, including jet engine manufacturer Rolls Royce, airlines, such as British Airways parent company IAG, or financial stock, such as HSBC or Barclays. 

Short selling is when an investor borrows a security and sells it in the current market. They are betting on the security going down in price, in which case they will buy it back at a later date and hopefully at a cheaper price.

Short selling has a high risk-to-reward ratio. An investor can secure significant profits, but can also end up with infinite losses, if they are not careful.  In August, Ortex Analytics found that short sellers recorded losses of £420 million. 

"Last month we saw a number of big trades turn sour for short-sellers, which impacted overall profitability in August," said Peter Hillerberg, co-founder of Ortex Analytics, in a press release. "At the time, we predicted that the pendulum may swing back the other way in September and that's exactly what we've seen as short sellers continue to profit from the uncertainty surrounding the pandemic."

Ortex Analytics outlined the top five most profitable and least profitable shorts in September.

"What has been fascinating to note is the extent of the swing for some companies; four of the top 5 most profitable trades this month were significant loss making trades in August, highlighting the speed at which fortunes can change during this volatile period," Hillerberg said.

Most Profitable

1) Rolls-Royce Holdings plc

Ticker: RR

Short profit: £187.7 million

2) International Consolidated Airlines Group, S.A.

Ticker: IAG

Short profit: £168.8 million

3) BHP Group plc

Ticker: BHP

Short profit: £125.1 million

4) Royal Dutch Shell Group plc

Ticker: RDSA

Short profit: £115.1 million

5) Wm Morrison Supermarkets plc

Ticker: MRW

Short profit: £24.8 million

Least Profitable

1) British American Tobacco plc

Ticker: BATS

Short profit: -£49.4 million

2) Ocado Group plc

Ticker: OCDO

Short profit: -£48.5 million

3) Just Eat Takeaway.com

Ticker: JET

Short profit: -£27.9 million

4)  Unilever Plc

Ticker: ULVR

Short profit: -£23.6 million

5) DS Smith Plc

Ticker: SMDS

Short profit: -£18.6 million

 

 

 

 

 

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