Mr Dusaniwsky said overall short exposure in the US market grew by $US108 billion in 2020 to $US1.05 trillion in equityADR short interest. “This rise in short interest masked the fact that short sellers were actively covering their positions into the 2020 rally.”
The $US282 billion of mark-to-market increase in the value of shares shorted was partially offset by $US175 billion in buy-to-covers. Short-side mark-to-market losses caused short squeezes in many shorted domestic equities/ADRs, he also said.
“Looking at the first three weeks of 2021 we are seeing much the same short activity we had seen in 2020,” Mr Dusaniwsky said.
Total domestic short interest has increased by $US51 billion as the markets have rallied and pushed share prices higher. As their stock prices have risen, short sellers have trimmed their positions due to short squeezes and risk limit adjustments.
“History may not repeat itself exactly, but so far in 2021 the storyline seem awfully familiar,” Mr Dusaniwsky said.
As for the top five best short bets last year: Exxon Mobil, AT&T, Raytheon, Luckin Coffee’s ADR and Wells Fargo.