Traders concerned by bearish bets ahead of Steve Jobs health announcement

Apple stocks bets raise suspicions

Stock market traders have raised questions about a number of bearish bets on Apple stock on Friday.

According to the Financial Times, large volumes of Apple shares were sold shortly before it was announced that Steve Jobs would be taking a medical leave of absence. This is a particularly sensitive issue for a company whose share price seems to be so inextricably linked with its enigmatic CEO.

The ‘bearish’ bets are likely to be part of a practice called short selling. A short selling trader (usually from a hedge fund) borrows shares from a shareholder for a short period, and sells them in the hope that their price will fall. When the price does fall, the trader buys the share back at a lower price and returns them to the shareholder.

Obviously this can be quite a risky business, since if the prices rise then the trader will lose money reacquiring the shares, and this is why suspicions have been raised over the fortuitous timing of these bets especially as it came so shortly before another record breaking quarterly report from Apple.

The US Securities and Exchange Commission has apparently declined to say whether or not it is investigating.

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