Zhitong Finance APP learned that at the beginning of the year, US stocks fell one after another, and short sellers are reaping huge profits.
As of Friday's close, short sellers made $114 billion in profits in January by market capitalization, according to S3 Partners. The sell-off in U.S. stocks is still grim. On Monday, the S&P 500 temporarily fell into correction zone, falling more than 10 percent from an all-time high; the NASDAQ fell about 13 percent cumulatively in January, its worst month since 2008.
The decline in U.S. stocks was triggered by a potential policy shift by the Federal Reserve. The central bank has signaled that it will raise interest rates this year and is expected to shrink its balance sheet. This marks that the Fed is actively tilting toward hawks after implementing ultra-loose monetary policy in the past two years to support the economy.
Dusaniwsky, general manager of the predictive analytics division at S3 Partners, said: "Shorts seek profit by predicting a decline in stocks, they borrow shares and sell those borrowed shares to buyers willing to pay the market price. When the stock price falls, traders buy it back for less money, pocketing the spread. ”
The most profitable short bet this year is Tesla (TSLA. US), the company's stock price is currently down nearly 16%. As of Last Friday, short sellers who bet on Tesla had made $2.3 billion in market-based profits, according to S3.
In addition, for Netflix (NFLX. US) short bets are also profitable. After the streaming giant acknowledged that fierce competition would squeeze its user growth, the company's stock has fallen 37 percent this year, leaving short sellers earning $1.6 billion.
In the first two years, the bears suffered heavy losses. Game Station (GME. US) in the retail vs. Wall Street is a scene that the global financial industry cannot erase in 2021. Although the share price of Game Station began to fall in the second half of 2021, as of January 7, 2022, the share price of Game Station has still increased by more than 600% in the past year. Melvin Capital, which shorted the game station, lost 39% for the whole year of 2021, and the subsequent losses narrowed.
In 2020, Tesla bears lost $40.1 billion in blood for the full year, the largest loss ever, more than the combined short losses of the other 9 stocks. Short Apple (AAPL. 2020. US) investors lost $6.7 billion, amazon (AMZN. US) shorts lost $5.8 billion.