Equities: Thank volatility and those shorts


Hello, volatility! In late February, as the stock market went into freefall, leaving television pundits stammering into the cameras, hedge funds with quality short positions profited handsomely. On a single day that month, February 27, the S&P 500 dropped 3.47%, taking away some gravy from long positions. But that same move aided many short positions, especially those in subprime lenders.

Even as the U.S. equity markets suffered - with the S&P 500 plunging 2.19% for the month and the Russell 2000 dropping 0.79% - the Absolute Return U.S. Equity Index climbed 0.51% in February (not quite equalling its 0.9%