skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. SCHW: Bloomberg headline "Toronto-Dominion Becomes Biggest Bank Short With $3. [Charles Schwab Corporation (The)]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Bloomberg headline "Toronto-Dominion Becomes Biggest Bank Short With $3.7 Billion on the Line". Is this just noise or should I be concerned?
Asked by John on April 05, 2023
5i Research Answer:

TD has become a short target for three main reasons: One, US shorters like to bet against the Canadian housing market. It has been a theme now for multiple years. Two, TD is in the midst of acquiring FHN, a US regional bank. It is a share acquisition and arbitrageurs can short the bank againt FHN shares. Three, TD owns part of SCHW, which has been the subject of liquidity rumours. But on a total basis, only 4% of TD shares have been shorted, versus about 2% for RY. It is more of a media story; we would not consider 4% that noteworthy.