Short sellers just reaped a $7 billion bounty in the most profitable bets against banks since the 2008 financial crisis
Short sellers raked in over $7 billion in profits last month by betting against US and European bank shares amid a turmoil that engulfed the industry – the most profitable short trades in the sector since the 2008 financial crisis, according to financial analytics firm Ortex.
The haul was generated through a tumultuous month for the financial sector following the collapse of Silicon Valley Bank and Signature Bank just days apart and UBS's takeover of Credit Suisse, as investors feared that contagion effects from these events could spill into the rest of the sector. SVB was the most profitable target for the traders, who made $1.3 billion shorting the stock of the failed California-based bank, according to Ortex. Short sellerswagering on a fall in First Republic Bank shares and $684 million shorting Credit Suisse, the analytics firm added.
"March was the single most profitable month for short sellers in the banking sector since the 2008 financial crash," Ortex's co-founder Peter Hillerberg said in an emailed note.
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