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As a sector fund trader (only on the long side) - I've been
following the sector
SPDRs since they came out a few months ago. Haven't traded
them yet though -
primarily because all but the Technology SPDR have very
little liquidity (i.e.,
there's almost no volume - only 103,000 shares on XLE today
- and that's higher than it was a few weeks ago) - and
relatively large spreads. Perhaps that will change when
more sectors come into favor - but - for now - I won't touch
them (and it's probably even harder to do them cost
effectively on the short side than the long side).
One suggestion. These SPDRs are market cap weighted - and
the largest positions
constitute a huge percentage of the stock. For example - in
Energy - Exxon,
Royal Dutch Petroleum and Mobil make up over 50% of the
SPDR. The 10 largest
positions account for 75% of the SPDR. And it's probably a
lot easier to short
XON, RD and MOB than XLE. Robyn
tabanna wrote:
> SP DRs
> ----------
> Do any list-members have experiencs to relate, concerning availability of
> stock to Sell Short ??
>
> Both SPY and the Select Sector Shares are EXEMPT from the Uptick Rule,
> governing short sales, and one would imagine the sponsoring exchange, the
> Amex, has envisioned a class of shares, which can be traded much like a
> liquid future, long or short.
>
> Mr Jacob Goldfinger of Amex, will only say that this is a matter for ones
> broker, and not an 'exchange matter' , although it would seem logical that
> the Amex would have an interest in lubricating the currently 'clunky'
> machinery, by sponsoring lenders of stock to facilitate short sales ~ It
> seems a joke to have an UpTick Exempt stock, only to be told "No stock
> available, so, try again tomorrow".
>
> In 'Practise' it is very difficult to get hold of stock to short ~ yesterday
> one of the larger internet-stockbrokers could not find any XLE [ SP DRs
> Select Sector ENERGY] shares to short.
>
> Making another attempt today , all they could find was just 100 [one hundred
> shares] of XLE.
>
> Does any one have similar experiences to share ??
>
> cheers
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