Wednesday's Historic Short Squeeze Was Best Day For Hedge Funds In 4 Years

According to a ad hoc note from Goldman's Prime Brokerage, Wednesday was a historic day for global fundamental long/short hedge funds (who had a miserable month of March): the index was up +2.9%, its best day since March 16, 2022 - a 5.2 sigma event vs. the past 5 years - and erased more than half the 2026 losses, with the L/S index now up +4.15% YTD. US-Focused managers up +2.1% (now up 1.4% YTD).

A big reason for this was the previously discussed pile up in ETF shorts which saw a historic squeeze: according to Goldman, US-listed ETF shorts fell -7.4% yesterday, the largest 1-day covering since Aug ’20 and the 3rd largest in the past decade!