Long Only Reporting

Hedge funds that file 13-F forms with the SEC are only required to disclose their long positions. They are not required to disclose their short positions. When we set out to create this website in 2013, we understood the challenge this fact poses.

For instance, it is common for a hedge fund to own stock in a company even if they are making a bearish bet. How is that possible? Well, many hedge funds actively trade, and make use of both stock and stock options. For example, a fund that wants to make a bearish bet on XYZ may go long puts, or go short calls. Options are less liquid than the underlying stock as a general rule, and therefore a fund may trade around its options position by actually going long the stock against the options position.

We have seen examples of this, where the financial media takes the long-only information from a 13-F filing and jumps to the conclusion that a firm which previously made a very public short bet against a company, has now reversed its bet and gone long, based solely upon the long-only holdings found in the 13-F filing.

At Holdings Channel, we approach the data with two angles we feel are unique and useful in helping to make sense of 13-F filings. First, within individual filings we attempt to aggregate positions by entity, so that for instance for a firm reporting a long position in the common stock of a company but also showing they are long puts in that same company, we attempt to group those positions together, along with calls, preferreds, warrants, and bonds related to that entity. Second, we assemble aggregate information across thousands of funds. While the stock holdings of one individual fund may not tell the whole story, the sum total of the share count held by thousands of funds, between one reporting period and another, can be a lot more revealing and relevant.

Thanks for visiting Holdings Channel, we hope you will find our site to be educational and useful. A reminder that 13-F filings and market data in general are inherently error prone, and none of the information presented on our website should be considered to be free of errors or relied upon for any investing decisions. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. Please read our full disclaimer statement.

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