Hedge funds, short sales, and the 52-week high

Yixuan Rui and Robert B. Durand

Journal of Behavioral and Experimental Finance, 2025, vol. 47, issue C

Abstract: Hedge funds tend to significantly reduce their shareholdings when a firm’s short interest is high and its share price is close to its 52-week high. In addition, hedge funds in general are more likely to increase their holdings when the share price is falling away from its 52-week high and the short interest is low. Mutual funds, pension funds, and other institutional investors typically do not engage in such specialized trading strategies. The trading behavior of hedge funds demonstrates that they follow a contrarian strategy and use short interest to exploit the near-term reversal of price movements.

Keywords: Hedge funds; Short interest; 52-week high (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:47:y:2025:i:c:s2214635025000644

DOI: 10.1016/j.jbef.2025.101083

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