Selling short on the stock market is increasing in popularity in Denmark, according to an analysis by the Financial Supervisory Authority.
Five years ago, the practice accounted for 0.3 percent of all transactions, but by the beginning of 2018 this had risen to around 1 percent – positions worth a total of 25 billion kroner.
When traders sell short, it is with shares they have borrowed for a fee, but do not own, in the hope the shares can be bought back at a lower price for profit.
Reasons to be cheerful
The potential losses are infinite and the practice is frowned upon by many, as it can be a major contributor to market unrest.
However, Anders Balling, the deputy head of the FSA, told Borsen there are also advantages – namely how it increases liquidity, contributes to better price formation, and “allows for more targeted detection and customisation of risk exposure, which can help reduce systemic risks”.
Understandably there are safeguards in place that require traders to report any position in a company that exceeds 0.2 percent.
A rude Finnish welcome to Nordea
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TDC takeover approved by all regulators
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Bang & Olufsen revival continues thanks to new range
Luxury electronics retailer Bang & Olufsen has announced a third quarter increase in revenue of around 10 percent to 865 million kroner, as its new speaker and headphone range, B&O Play, continues to grow – this time by 25 percent. Growth elsewhere was stagnant, dipping 1 percent. EBIT rose from 18 to 49 million kroner and the Q3 post-tax profit was 28 million.
Another executive resigns at Danske Bank
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Chr Hansen “highly satisfied” with interim results
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Genmab expected to confirm 100 new jobs
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Brothers believed to be eyeing up vacuum in toy shop sector
Brothers Philip and Jacob Bier are believed to be eyeing up the vacuum left by the departure of Toys R Us – not only in Denmark, but also in Britain, reports Berlingske Business. The pair reportedly have plans for a store that primarily sells children’s clothes and toys, possibly with echoes of Tiger, a store that Philip Bier sold a major stake in last year.