Scarcity of New Issues Driving Speculators From the Market.(short selling)(Brief Article)

One of the few benefits top European high yield bond underwriters see in the recent drought of new issuance is the near eradication of short-term speculative traders, or "spivs" (also known as "flippers"), from their market. Typically lurking at hedge funds or on proprietary desks, these third-party traders buy bonds in the primary with the sole intent of selling their allocations into the secondary market for a profit. With so few new issues around, underwriters believe these traders will be starved out of the market.

Spivs rely largely on primary market volume for their profits. In cases like the current market drought, some turn to the secondary market to short outstanding issues. Even that, though, has become increasingly difficult in these turbulent times.

For one, the short seller …