Are Short Sellers Betting Against the Major Banks?

Banking, finance, and taxes

Published: April 25, 2018 9:50 am

Last Updated: January 12, 2020 12:30 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.

The April 13 short interest data have been compared with the previous figures, and short interest moves in these selected bank stocks were mixed.

Bank of America Corp. (NYSE: BAC) saw its short interest increase to 123.19 million shares. The previous level was 121.65 million. Shares were last seen trading at $30.00, in a 52-week range of $22.07 to $33.05.

The number of JPMorgan Chase & Co. (NYSE: JPM) shares short fell to 24.65 million from the previous level of 25.64 million. Shares recently traded at $109.95, in a 52-week range of $81.64 to $119.33.

Citigroup Inc. (NYSE: C) short interest increased to 22.40 million from the previous level of 21.23 million. Shares were trading at $68.10, in a 52-week range of $58.93 to $80.70.

Wells Fargo & Co. (NYSE: WFC) short interest shrank to 29.85 million shares from the previous reading of 31.68 million. Shares were trading at $52.50, within a 52-week range of $49.27 to $66.31.

Short interest in Goldman Sachs Group Inc. (NYSE: GS) increased to 6.08 million shares from the previous 5.95 million. The stock recently traded at $238.80, within a 52-week range of $209.62 to $275.31.

Morgan Stanley (NYSE: MS) short interest for this settlement date decreased to 9.67 million shares from the previous 10.69 million. Shares were changing hands at $52.20, in a 52-week range of $40.43 to $59.38.