Tuesday, March 28, 2023
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Short sellers profit greatly from SVB crash

During the Silicon Valley Bank and Signature Bank fiasco, the shorts have been cleared up.

Regional bank short sellers have made a cool $3.53 billion in mark-to-market profits so far in March, according to fresh data from S3 Partners. Short sellers seek to profit from a decrease in stock price. Mark-to-market gains for shorts have increased by $2.29 billion just in the past three trading days.

According to S3 Partners, the top 20 most-shorted regional bank stocks included Silicon Valley Bank and Signature Bank.

The fall of Silicon Valley Bank on Friday, which was the second-largest bank failure in the United States, was followed by the failure of Signature Bank, which was the third-largest financial bust. Shareholders in each outcome were completely destroyed.

Last Sunday, regulators intervened to support bank depositors in order to stop the onset of a larger financial sector catastrophe.

Despite the government’s assistance, however, this week’s extreme levels of volatility in bank stocks led the shorts to emerge from hiding.

According to S3 Partners, the SPDR S&P Regional Banking Sector ETF fell 23% from March 8 and March 13. According to S3 Partners, this decline has resulted in $416 million worth of fresh short selling in regional banks during the past seven days.

Nevertheless, as the week progresses and the bank-bust storylines begin to fade, the short trade on regionals may be positioned to turn around.

In response to this unexpected increase in stock prices, “we anticipate see a wave of short covering in some of the regional banking companies as short sellers attempt to realise some of their recent $2.29 billion in mark-to-market profits,” predicts Ihor Dusaniwsky of S3 Partners.

Patrick Huston
Patrick Huston
As a senior editor, Patrick is a professional who is in charge of putting out business news. As a senior editor, Patrick is likely to be in charge of the duties of junior editors and writers, make sure the content is correct and high-quality, and work with other departments to make sure the business news is published on time. Patrick knows a lot about business and the latest market trends. He uses this knowledge to choose and edit stories that are both interesting and useful to readers. He also works with reporters and analysts to come up with insightful pieces that help readers keep up with the latest business news. Patrick is a very important part of keeping the public informed and interested in important business issues. He is passionate about journalism and strives for excellence.

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