Short sellers target mid-cap retailers

The retail sector came under pressure as information provider Data Explorers highlighted in a report that several retailers have recently seen a rise in the amount of stock on loan to short sellers. Short sellers, many of which are hedge funds and traders, typically make money by borrowing stock from a third party (usually a broker) and selling it, with the intention of buying the shares back at a later date to return to that third party at a lower price.
FTSE 250
According to Data Explorers, Carpetright, Home Retail Group and Mothercare have all suffered a spike in the volumes of stock out on loan.
The increase in stock on loan comes amid speculation the retail sector will demonstrate next week that several companies did not trade well during the festive period.