Hedge funds to sell up to $30 billion of stocks soon, potentially exacerbating the recent downward move in shares

by
Sharing is Caring!

via reuters:

LONDON, Oct 2 (Reuters) – Hedge funds using computers to trade equities are expecting to start selling to the tune of $20 billion to $30 billion in the next two weeks given retreating stock markets, a UBS (UBSG.S) note seen by Reuters shows.

See also  Option skew hits 180; eight of the top ten readings occurred this December alone. Major institutions are liquidating and as soon as volume returns next week they will hit the bid.

Hedge funds using algorithms to follow market trends have turned neutral from bullish on stocks, the UBS note said.

The bank anticipates as much as $30 billion of outflows will soon hit markets, potentially exacerbating the downward move in shares, as these hedge funds start selling stock to follow the recent negative performance.

See also  Stocks are not in a bubble, investors should keep buying, Wells Fargo has said.

This will be the first time these hedge funds will be net short equity markets since November 2022, the bank said.

 


46 views