The Big Shorts: How Buy-Side Stock Holdings Disclosures Reveal Firms’ Short Sale Strategies

With short trading activity frequently accounting for more than 50 percent of a stock’s total traded volume, according to Finra, and some “spectacular” short trades recorded in the past year, short sales can be both profitable and risky. Max Bowie reports on startup Caretta Data’s efforts to bring transparency and insight to short trading.

Buy and sell

Founder and director Adam Longenecker—a quantitative research analyst whose work as director of quantitative research at fund flows data vendor EPFR Global  helped the vendor increase sales by more than 400 percent over four years—originally set up Caretta to analyze holdings in exchange-traded funds. “I had high-end quants wanting me to do what I’d done at EPFR for ETF data,” he says.

However, midway through compiling its ETF holdings dataset, Longenecker says the vendor “stumbled across” a

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