Short sellers make huge profits from four FTSE 100 stocks in September

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Short sellers made GBP418mln on FTSE 100 bets last month including on Rolls-Royce Holdings PLC (LON:RR.) and Royal Dutch Shell PLC (LON:RDSB).

Analysis of short positions against Footsie companies in September by Ortex Analytics found that London’s blue chip index was a rich hunting ground for investors and hedge funds looks to bet on share prices falling.

Overall, short sellers made profit on 53 out of the 100 companies that make up the UK’s large cap index.

The most profitable short position was against Rolls Royce, which returned GBP188m to short sellers in September, according to Ortex data.

British Airways parent International Consolidated Airlines Group SA (LON:IAG) was next, returning GBP169mln, followed by BHP Group PLC (LON:BHP) at GBP125mln and Shell, at GBP115mln.

This quartet was by far the most productive on the index last month, with Wm Morrisons Supermarkets PLC (LON:MRW), InterContinental Hotels Group PLC (LON:IHG) and BP PLC (LON:BP.) in the subsequent places place with a calculated short return of just under GBP25mln, GBP17mln and GBP13mln respectively.

August had seen a number of big trades turn sour for short-sellers which impacted overall profitability, noted Peter Hillerberg, co-founder of Ortex.

“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.

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

The companies that lost most money for short sellers were British American Tobacco PLC (LON:BATS) and Ocado Group PLC (LON:OCDO), both with a loss of around GBP49mln, followed by Just Eat NV (LON:JET) and Unilever Group PLC (LON:ULVR), with GBP28mln and GBP24mln shorting losses respectively.

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