So much for October's reputation as a bad month for equities. After slumping more than 7 percent in the third quarter, the S&P 500 is up nearly 5 percent this month, and this October rally has short sellers scrambling to cover bearish bets on some well-known exchange-traded funds.
The October rally in equities has forced three consecutive weeks of covering in ETF short positions, reducing the shares out on borrow across scores of popular ETFs, according to research out today by S3 Partners Managing Director of Research Ihor Dusaniwsky. S3 Partners provides securities finance data and lending services to institutional investors, including hedge funds.
To this point in October, traders have covered $4.1 billion in short positions in the SPDR S&P 500 ETF (NYSE: SPY), the world's largest ETF. Keeping with the theme of short sellers scampering out of positions in large U.S. equity index products, shorts have also reduced bearish bets on the iShares Russell 2000 Index (ETF) (NYSE: IWM), the largest small-cap ETF, by over $500 million this month, according to S3 data.
/www.benzinga.com/trading-ideas/long-ideas/15/10/5937882/october-rally-has-etf-shorts-scrambling-to-cover alt=October Rally Has ETF Shorts Scrambling To Cover>Full story available on Benzinga.com
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