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  5. SCHW: Bloomberg headline "Toronto-Dominion Becomes Biggest Bank Short With $3. [Charles Schwab Corporation (The)]
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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?
Thanks
John

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. 

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