To The Moon

A chain reaction occurred after SVB's bank run. Regional banks became the biggest targets for short sellers.

$First Republic Bank(FRC)$ $Western Alliance(WAL)$ $PacWest(PACW)$ $Metropolitan Bank Holding Corp.(MCB)$ $Customers(CUBI)$

Short-sellers profit when a stock falls. They borrow shares to immediately sell them with plans to buy them back when the price is lower, making a profit from the difference. 

However, it's worth noting that when a large number of traders or investors hold short positions on a particular stock, and the supply of available shares to buy is limited while demand for the stock increases, a short squeeze may occur.

In this situation, these traders may start to panic and buy back the stock to cover their short positions, causing the stock's price to rise even further.

$SPDR S&P Regional Banking ETF(KRE)$: Short interest in the biggest regional bank ETF hit 78% on March 3

Short sellers pushed short interest in the $2.2 billion $SPDR S&P Regional Banking ETF(KRE)$ gradually higher over several weeks before it peaked at about 78% of outstanding shares on March 3, according to analyst firm S3 Partners. This is the highest level in at least a year.

As balance sheet concerns begin to ripple throughout the financial system, bets on shorting regional banks are the winners. The fund, the largest ETF tracking regional banks, has fallen nearly 15% in the past week - Thursday's drop was the biggest since June 2020 - after Silicon Valley-based SVB Financial Group was forced to sell bonds to raise cash.

Is $Charles Schwab(SCHW)$ Wrongly Killed?

Charles Schwab Corporation is not a bank, but it is a financial institution that provides brokerage, banking and other financial services. As with bank stocks, Schwab's stock price can be affected by changes in the overall financial industry, the economy and interest rates.

One reason for $Charles Schwab(SCHW)$ 's decline is that, like $SVB Financial Group(SIVB)$, it holds a large amount of HTM assets, which have depreciated even more than SVB's. However, as a financial institution, its liquidity is much better than regional banks.

In the Banking Crisis Storm, at least some savvy investors were not affected by the sell-off, and even took advantage of some speculative opportunities.

As an investor, what investment strategies do you have? Will you boldly short regional banks?

Or accurately bottom out and invest in the four major safe-haven banks $JPMorgan Chase(JPM)$ $Bank of America(BAC)$ $Citigroup(C)$ $Wells Fargo(WFC)$? Or buy other safe-haven assets?