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

Mining giant BHP was the biggest cause of pain for the blue-chip bears as a surge in iron ore prices caused the stock to soar, inflicting losses of £223mln in December alone

BHP Group PLC - 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 BHP Group PLC (LON:BHP) 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 Rio Tinto PLC (LON:RIO) also inflicted £20.6mln in losses on the bears, while Just Eat Takeaway.com NV (LON:JET) and Paddy Power owner Flutter Entertainment PLC (LON:FLTR) 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 HSBC Holdings PLC (LON:HSBA), the most portable short position last month. The second most lucrative firm was AstraZeneca PLC (LON:AZN) with £12.9mln in shorting profits followed by WM Morrison Supermarkets PLC (LON:MRW) 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 Rolls-Royce Holdings PLC (LON:RR.) which netted short sellers £553.3mln and National Grid PLC (LON:NG.) 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 Ocado Group PLC (LON:OCDO) 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.

Quick facts: BHP Group PLC

Price: 2357 GBX

LSE:BHP
Market: LSE
Market Cap: £119.19 billion
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