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FTSE 100 Short Sellers Lost £238mn In January As Gamestop Phenomenon Reaches UK

Short sellers lost £238m on FTSE 100 short positions in January as retail investors buoyed share prices and targeted short positions, according to data from Ortex Analytics.

In the wake of the GameStop phenomenon that has rocked US markets, a number of heavily shorted UK listed stocks were targeted by retail investors, driving share prices higher and creating a “short squeeze” on the stock.

Pearson Plc, one of the most shorted stocks on the index, was the largest loss making position for short sellers in January after it’s stock rose almost 12 per cent in a single day’s trading.

Short seller’s top 5 biggest losses - January 2021

Pearson plc: -£108,313,768

Ocado Group plc: -£75,999,533

BHP Group: -£57,235,173

Hargreaves Lansdown plc: -£52,208,241

J Sainsbury plc: -£40,050,874

Commenting on the data, Peter Hillerberg, co-founder of Ortex Analytics, said: “The story that started with GameStop developed significant momentum throughout January and has impacted trading positions in markets beyond the US. Even on the UK’s main market we can see activity in recent weeks to target institutional short positions and force a short squeeze situation.

“Whilst the GameStop story may be losing momentum as we enter February, it no doubts points to a fundamental shift in the way markets work. The information advantage previously held by financial institutions has been dismantled and retail investors are now able to build positions that take advantage of historically unseen market inefficiencies. This has far reaching consequences for anybody who invests, but particularly for short sellers who, for the first time, find themselves the target of a well organised and well informed opponent.” 

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