Short Sellers Up the Ante on Major Banks

Banking, finance, and taxes

Published: January 25, 2018 11:15 am

Last Updated: January 12, 2020 4:06 am

The financial sector was a major part of the Great Recession, and it has been a major part of the recovery and raging bull market since then. Generally speaking, the major financial institutions in the United States are a good barometer of the current state of U.S. markets.

So when short sellers make a play against these major banks, they are effectively betting for a downturn. Conversely, when they back off they might be expecting a surge. Granted, some plays are directly against individual companies, like we saw with Wells Fargo early in 2017.

With bank earnings in the bag, we’ve seen multiple institutions hit new highs. Perhaps this is pulling short interest up as well.

The January 12 short interest data have been compared with the previous figures, and short interest in most of these selected bank stocks increased.

Bank of America Corp. (NYSE: BAC) saw its short interest rise to 145.10 million shares. The previous level was 140.15 million. Shares were last seen trading at $32.15, in a 52-week range of $22.07 to $32.25.

The number of JPMorgan Chase & Co. (NYSE: JPM) shares short grew to 28.79 million from the previous level of 27.57 million. Shares recently traded at $115.30, in a 52-week range of $81.64 to $116.11.

Citigroup Inc. (NYSE: C) short interest fell to 27.35 million from the previous level of 27.65 million. Shares were trading at $79.65, in a 52-week range of $55.23 to $80.19.

Wells Fargo & Co. (NYSE: WFC) short interest increased to 36.20 million shares from the previous reading of 33.99 million. Shares were trading at $65.60, within a 52-week range of $49.27 to $65.78.

Short interest in Goldman Sachs Group Inc. (NYSE: GS) rose to 5.44 million shares from the previous 4.93 million. The stock recently traded at $267.00, within a 52-week range of $209.62 to $268.50.

Morgan Stanley (NYSE: MS) short interest for this settlement date increased to 12.55 million shares from the previous 11.08 million. Shares were changing hands at $57.25, in a 52-week range of $40.06 to $57.73.