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Robinhood stocks are popular with investors – and short sellers, too.
More than 12.5 million HOOD shares – or about 25% of the free float – were sold short at the close of trading on Wednesday, according to data from S3 Partners. In comparison, the average short-term interest in a business is 5%.
And the interest in Robinhood will likely only increase from here on out.
“Short selling today is once again mitigated due to the lack of supply of equity borrowing… as well as the high cost of reducing expected profits from short trading,” the report said.
As the supply increases in the coming weeks, S3 expects this to give traders keen to short sell stocks even more opportunities to do so.
Not everyone runs Robinhood bets against the stock – part of short selling is for day traders to profit from the volatility of the stock.
“With price volatility, there is more stock of long-term buying and short selling,” Ihor Dusaniwsky of S3 Partners told The Post.
The new data comes after endemic speculative institutions and retail traders were able to band together to make Robinhood a short target.
A warning that traders are hyper aware of in 2021? “With the stocks even, you never know what might happen next,” adds Dusaniwsky.
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