Goldman Sachs: Hedge funds increase short positions on US stocks!
Due to the surge in short selling, the ratio of long positions to short positions for Goldman Sachs institutional brokerage clients is approaching its lowest point since last autumn.
According to data from Goldman Sachs' prime brokerage division, hedge funds have been increasing their short bets on US stocks during the most severe consecutive decline in the S&P 500 index since the collapse of Silicon Valley Bank.
Goldman Sachs' research report shows that as of last Friday, hedge fund clients have been increasing their short positions in individual stocks, ETFs, and stock index products for the third consecutive week.
Hedge funds have increased their short positions in five out of the past six weeks, with most of the activity happening in individual stocks.
Shorting stocks refers to borrowing stocks from brokerage firms such as Goldman Sachs and then selling them, hoping to close the position at a lower price.
Due to the surge in short selling, the ratio of long positions to short positions for Goldman Sachs' institutional brokerage clients is approaching its lowest point since last autumn. On October 12th last year, the S&P 500 index hit a 52-week closing low of 3577.03 points.
If this ratio continues to decline, it will reach its lowest level in five years. Some people consider the adjustment of hedge fund positions as a contrarian indicator, which means that excessive short selling may coincide with an improvement in the economy.
With the increase in short bets, funds are reducing leverage, which means they are trying to increase returns with less borrowed money. This is another sign that hedge funds are becoming increasingly concerned about the possibility of market volatility.