Shorting financials is in vogue

In the aftermath of the Bear Stearns blowup, not everyone was sobbing in their beer. A handful of hedge funds--the likes of Paulson & Co., Harbinger Capital, and Greenlight Capital--made a pretty penny by shorting the company, notes Financial News Online. The irony is that some of these funds were said to be prime brokerage clients. Right now, there's a fair amount of betting against other financials. Put buying activity is said to be really heavy right now, according Financial News Online. Put option open interest in Lehman shares is up nearly 65 percent this year. Puts on other financial firms have also soared. Now is this betting or hedging? Likely a bit of both. This getting to be really dramatic.

For more:
- here's the Financial News Online article about hedge funds and Bear Stearns

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