Apple Balm to Short Sellers

Chidem Kurdas

Bets on stocks going down have crashed against resurgent bulls and the Federal Reserve’s endless money printing – to use plain language for quantitative easing – which boost US stocks regardless of fundamentals.

In March short sellers lost 3% to 4% or more, depending on which index one consults. And this follows significant losses last year.

Apple has been a rare bright spot for short sellers Some bet against the stock last year, reasoning that the computer maker would suffer as people continue to move from computers to tablets. As the price went from $705 down to around  $400 in 12 months, closing the shorts realized big gains.

The bet is not over. There is even talk that it could get more costly to borrow Apple shares as more funds pile on the short selling trade.

This is one of the very few stocks that profited short sellers while dragging down returns on long portfolios. Even so, many funds still hold Apple, apparently hoping for recovery.


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