The crackdown on Chinese companies in a host of sectors by authorities there represented an obvious opportunity for short sellers to make bets against them.
Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, finds there was a “meager” $94 million of new short selling in U.S.-listed Chinese stocks over the last 30 days. “While shorts were not looking to increase their exposure in these names as stock prices dropped, they may be quicker on the trigger if stock prices surge for an extended period of time in order to lock in recent mark-to-market profits,” said Dusaniwsky.