Bloomberg Business cites new research from Olin professors on short sellers in a story titled, “The Crucial Piece of Information That Big Traders Get Before Everyone Else.”
For short-selling data, the edge can be significant. In an academic paper in February, David Rapach of St. Louis University and Matthew Ringgenberg and Guofu Zhou at Washington University in St. Louis found that the higher the level of short interest, the more likely a stock will fall. Short sellers are better at predicting performance than investors who solely focus on rising markets because of the difficulty, risk and expense of making bearish bets, they said.
