Short Interest in Freddie Mac Doubles

With continued concerns about GSEs, Freddie Mac and Fannie Mae, short interest in the pair has been on the rise. Are shorts betting on one over the other?

Over the past week, both Freddie and Fannie are down ~45%. MTD they are down over 60% and YTD they are down about 90%. As they have fallen in the past few months, short interest in the two has continued to rise. According to data from Thomson Reuters, since May, short interest as a percent of shares outstanding in Freddie has doubled. Short interest in FNM has also gone up, but has pulled back in the past month (see table below).

080821 Freddie and Fannie.jpg

Note: The total number of short shares in Fannie has gone down by about 8 million shares. The pull back is also being driven by a 94 million share increase in the number of shares outstanding.

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