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Short sellers suffer holiday horror in December, end 2020 with GBP460mln in losses

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The FTSE 100’s short sellers were left bereft of Christmas cheer in December after suffering heavy losses during the month and capping off a dismal 2020 that left them out of pocket to the tune of over GBP460mln.


According to data from Ortex Analytics, short sellers were stung particularly badly in December by mining giant BHP Group PLC (LON:BHP) after a surge in iron ore prices caused that shares to climb in value over the month, causing those betting against the firm to lose a total of GBP223.3mln.


Fellow miner Rio Tinto PLC (LON:RIO) also inflicted GBP20.6mln in losses on the bears, while Just Eat Takeaway.com NV (LON:JET) and Paddy Power owner Flutter Entertainment PLC (LON:FLTR) cost short sellers GBP20.9mln and GBP24.4mln respectively.


The losses from bets against BHP alone offset gains of GBP28.2mln made by short sellers against HSBC Holdings PLC (LON:HSBA), the most portable short position last month. The second most lucrative firm was AstraZeneca PLC (LON:AZN) with GBP12.9mln in shorting profits followed by WM Morrison Supermarkets PLC (LON:MRW) at GBP7.3mln.


For 2020 as a whole, HSBC topped that chart once again as the most profitable short position with total profits of GBP671.1mln, followed by aircraft engine maker Rolls-Royce Holdings PLC (LON:RR.) which netted short sellers GBP553.3mln and National Grid PLC (LON:NG.) with gains of GBP282.4mln.


Similarly, BHP was the worst stock for short sellers last year, costing the bears GBP454.3mln over the 12 months, Flutter followed, causing losses of GBP312mln, while grocery firm Ocado Group PLC (LON:OCDO) was the third least profitable short position in 2020 causing losses of GBP305.3mln.


“December epitomises what a challenging year it’s been for short sellers. Defined by huge and unpredictable swings from profit to loss, it has undoubtedly been the most challenging year the industry has ever faced”, Ortex co-founder Peter Hillerberg said in a statement.


“Unfortunately, short sellers must brace themselves for this to continue into the first half of 2021, as we remain under the shadow of the pandemic”, he added.

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