Shares of Fannie Mae / Federal National Mortgage Association (OTCQB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCQB:FMCC) have performed pretty well, all things considered, over the last few months. In fact, shares of both rose nearly 5% on Thursday, although they’ve struggled a bit today so far.
Viewing short interest in Fannie, Freddie
Of course whenever there’s a company as controversial as Fannie and Freddie have been, there’s bound to be some short interest, and the case is no different with these two government-sponsored entities. According to the Financial Industry Regulatory Authority (FINRA), at the end of December, there were nearly 6.9 million shares of Freddie Mac / Federal Home Loan Mortgage Corp (OTCQB:FMCC) and about 8.7 million shares of Fannie Mae / Federal National Mortgage Association (OTCQB:FNMA).
“There appears to be someone or a group of people that is short Fannie Mae, 8.7 million shares as of December 31st, Chris Grant, director of market data for OTC Markets, told ValueWalk.” There could be a number of reasons for this, but if you look at the average daily volume, the short positions could, in theory, get covered within one day of trading, which goes to show the liquidity of our platform.”
Fannie, Freddie shorts move to cover
As shares of Fannie Mae / Federal National Mortgage Association (OTCQB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCQB:FMCC) have slowly risen over the last few months, it seems that those who were shorting it have been moving to at least partially cover their position.
According to FINRA’s data, Fannie Mae especially saw short interest decline in December. It fell nearly 29% between Dec. 13 and Dec. 31. Short interest in Freddie Mac has declined as well, albeit much more slowly than Fannie. On Dec. 13, there were 7 million shares of Freddie sold short, while on Nov. 29, there were 7.2 million shares sold short.
On Dec. 13, more than 12.2 million shares of Fannie Mae were being shorted, while on Nov. 29, about 12.4 million shares were sold short, showing some stability in that month. However, in general, short interest in Fannie has bounced around a lot more than Freddie’s has, marking a significant increase of nearly 24% in the second half of November.