Short sellers suffer holiday horror in December, end 2020 with £460mln in losses

The FTSE 100’s short sellers were left bereft of Christmas cheer in December after suffering heavy losses during the month and capping off a dismal 2020 that left them out of pocket to the tune of over £460mln.

According to data from Ortex Analytics, short sellers were stung particularly badly in December by mining giant () after a surge in iron ore prices caused that shares to climb in value over the month, causing those betting against the firm to lose a total of £223.3mln.

Fellow miner () also inflicted £20.6mln in losses on the bears, while () and Paddy Power owner () cost short sellers £20.9mln and £24.4mln respectively.

The losses from bets against BHP alone offset gains of £28.2mln made by short sellers against Holdings PLC (), the most portable short position last month. The second most lucrative firm was PLC () with £12.9mln in shorting profits followed by () at £7.3mln.

For 2020 as a whole, HSBC topped that chart once again as the most profitable short position with total profits of £671.1mln, followed by aircraft engine maker () which netted short sellers £553.3mln and PLC () with gains of £282.4mln.

Similarly, BHP was the worst stock for short sellers last year, costing the bears £454.3mln over the 12 months, Flutter followed, causing losses of £312mln, while grocery firm () was the third least profitable short position in 2020 causing losses of £305.3mln.

“December epitomises what a challenging year it’s been for short sellers. Defined by huge and unpredictable swings from profit to loss, it has undoubtedly been the most challenging year the industry has ever faced”, Ortex co-founder Peter Hillerberg said in a statement.

“Unfortunately, short sellers must brace themselves for this to continue into the first half of 2021, as we remain under the shadow of the pandemic”, he added.