Short-sellers must now notify the market when a net short position on a European stock reaches 0.5 per cent of the issued share capital of the company concerned and again at each 0.1 per cent increment after that. Then the information on UK stocks goes on the FSA’s website (in a particularly hard to use format).
But disclosures so far indicate that the new rules are missing a significant chunk of short-selling activity. Data from Markit suggests that, for example, Lonmin has around 17 per cent in undisclosed short interest. Read more
Here’s an interesting fact from Data Explorers, the securities lending data company, regarding short interest in BP-issued securities.
While the amount of BP equity that’s out on loan has contracted to 1.6 per cent of the shares in issue from just below 2 per cent for the UK listing in mid June — having risen to that level from almost nothing — there has been a small surge in the borrowing of BP corporate bonds. Read more
If you’re a hedge fund, you’re probably naturally long volatility, right? This means you’d want to protect yourself against volatility spikes by shorting the VIX index. Which, FT Alphaville notes, may explain why this short interest is the largest it’s ever been. Read more
So, are the denizens of Mayfair responsible for driving the share price of Prudential lower?
Er no. Read more