Here Is The City – According to recently published data (for the United States in particular), a large majority of short sellers are market makers who are hedging their bets on the options markets. They were not affected by the ban, which means that those who were using options to take synthetic short positions continued to do so.
The others involved in short selling are mainly hedge funds. The average return over the last ten years for hedge funds that used short-sale, convertible arbitrage and long/ short strategies was 3%, 4.75% and 7% respectively. One can hardly argue that they were over-informed and that they earned abnormal returns.
