Short sellers focused on shares of a cluster of U.S. regional banks, such as New York Community Bancorp (NYSE: NYCB), have seen around $1.04 billion in unrealized gains over the past two trading sessions, per data and analytics firm Ortex.
In a surprising turn of events, short sellers betting against a group of U.S. regional banks, including New York Community Bancorp (NYCB), have raked in a whopping $1.04 billion in unrealized gains over just the past two trading sessions. This information comes from data and analytics firm Ortex.
New York Community Bancorp (NYCB) took a significant hit, experiencing a 40% drop since Tuesday’s closing bell. The bank shocked the market by revealing an unexpected loss and slashing its dividends by 70%. Short sellers capitalized on this downturn, pocketing around $122 million of the overall gains.
The objective of short sellers is to earn profits by selling borrowed shares to repurchase them later at a lower price.
Ortex data reveals that about 3.6% of New York Community Bancorp’s free float is sold short. This figure has remained relatively stable over the past two days and is slightly below the 3-month average of 4.18%.
This situation is reminiscent of last year’s regional banking crisis when short sellers targeted shares of banks such as First Republic Bank, Silicon Valley Bank, and Signature Bank. Their actions potentially worsened share price declines during that period. The current focus on U.S. regional banks suggests an ongoing trend in the market, with short sellers strategically positioning themselves to profit from potential downturns in these financial institutions.
NY Community Bancorp (NYSE: NYCB) Stock Movement
NYCB stock jumped 5.04% to close at $6.04 on Friday. The traders had exchanged hands with 60,130,987 (60.13 million) shares compared to the average daily trading volume of 12.67 million.
