Securities lending and hedge fund positioning (with Katie Greifeld; Romaine Bostick)

Securities lending revenue grew 26% last year to $15.3 billion. The market is bifurcated: big hyperscalers (Amazon, Nvidia) have very low short interest, while AI-adjacent names like Infosys show strong negative conviction with high fees. WolfSpeed was reclassified as key AI infrastructure, leading to a 130% stock price jump, but shorts are now returning. IT stocks are the highest earnings sector in securities lending this year.

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RUT

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Metals

USD

Aequalan 2.5
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Nancy Allen 6.0

Securities lending and hedge fund positioning (with Katie Greifeld; Romaine Bostick)

ndx

Yoseloff notes that software stocks are down but the S&P is at all-time highs due to other winners, implying a bifurcated market where the NDX (heavily tech) may be rangebound as software weakness offsets AI strength.

rut

No explicit mention of small caps, but the focus on AI-adjacent and energy names suggests a narrow market, not broad small-cap strength.

wti

Conviction is still there, especially in airline and energy names, with high utilization levels and fees.

yields

Yoseloff discusses that leveraged capital markets haven't fully digested current rate levels compared to 2019-2021 deals, suggesting a period of adjustment rather than a sharp move in either direction.

Katie Greifeld

Asks about securities lending activity and appetite to short in a market at record highs.
Nancy Allen

Securities lending industry grew 26% last year to $15.3 billion in revenue. Volatility increases activity. There is a real focus on AI and infrastructure.
Katie Greifeld

Asks how this period compares to last year for long stock managers profiting from securities lending.
Nancy Allen

This year is pacing 34% of last year's total. Securities lending provides a real-time view into conviction and positioning.
Romaine Bostick

Asks whether positions related to the Iran situation (oil, airlines) are being unwound or held.
Nancy Allen

Conviction remains, especially in airline stocks which show high utilization levels. Certain energy and oil names also show strong conviction.
Romaine Bostick

Asks about the AI trade and whether it has broadened out beyond the Nvidia flywheel.
Nancy Allen

The market is bifurcated. Big hyperscalers (Amazon, Nvidia) have very low short interest (utilization <1%, fees at 20 bps). AI-adjacent names like Infosys show strong negative conviction with fees in the thousands of basis points.
Katie Greifeld

Asks about WolfSpeed specifically.
Nancy Allen

WolfSpeed was reclassified as key AI infrastructure, stock jumped 130% in the last month. Data showed squeeze score going up ahead of the announcement. Shorts are now returning with fees going up, indicating real conviction.
Romaine Bostick

Asks about traditional SaaS companies and the selloff/rebound in those names.
Nancy Allen

It's company by company. EV battery names are also under pressure. IT stocks as a whole are the highest earnings sector in securities lending this year.

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