Brocker.Org: Traders are losing billions betting against the FANG stocks (FB, AAPL, NFLX, GOOGL)

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of an adult yawning monkey. Fangs of the macaque. Ubud, Bali,
Indonesia.

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Betting against the so-called FANG stocks has been an exercise in
futility this year.

Short sellers targeting Facebook, Amazon, Netflix, and
Google (aka Alphabet) have absorbed a whopping $3.3 billion loss
in 2017, 
according to data compiled by
financial analytics firm

S3 Partners
.

Wagering on share weakness in the FANGs was always going to be an
uphill climb for traders. The companies have been an
indispensable pillar of the bull market for the past eight years,
with the group surging more than four times the S&P 500
index’s 253% increase over the period. The group has climbed
24% in 2017 alone, again more than quadruple the benchmark’s
return.

Downside speculators have been undeterred by the
strength. In fact, they’ve increased short interest balances
every month this year, S3 data show. While some investors are
simply hedging gains, more of them are betting that the pace of
share increases is unsustainable and that a selloff is bound to
occur, 

according
to Ihor Dusaniwsky, the firm’s head of
research.

As such, all four FANG stocks are in the top 15 most
unprofitable shorts this year, joining Tesla, Nvidia and
Caterpillar in the resistance against traders who profit from
weakness.

To Dusaniwsky, the most head-scratching aspect of the
failing trade is not that investors are doing it — it’s that
they’ve insisted upon doubling down despite continuously
whiffing.

“What is surprising is that short sellers continue to build
their positions as they rack up large mark to market losses month
after month,” he

 wrote in a client note.
“With both short interest and losses growing every month, short
sellers are realizing that FANG’s bite might be worse than their
bark.”

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