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russell 2000

When Shorting Small-Caps Goes (Horribly) Wrong

Here’s some Tuesday afternoon humor for you.

So the latest CFTC positioning data (out last Friday and current through last Tuesday) showed that specs (so basically, hedge funds) went all-in-er-er on bearish small-cap bets to levels last seen in September of 2014.

Specifically, specs were net short Russell 2000 minis by ~71k contracts on April 18. That marked 11 out of 12 weeks that bearish positions rose….

Russell

(BBG)

Well, that turned out to be a really – really – unfortunate bet…

RussellShorts

But before you get too excited about the apparent short squeeze and the accompanying run up to record highs in small-caps…

Russell2000

… just remember what you’re buying…

SmallCap

(Goldman)

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