According to Goldman Sachs, commodity trading advisors (CTAs)—trend-following hedge funds—are poised to heighten their selling of equities in the upcoming month, irrespective of market movement.

Currently, CTAs hold $31 billion in short positions in U.S. equities, while also being long on $16.5 billion globally, indicating the likelihood of aggressive selling occurring primarily outside the U.S.

“Most expected flows will likely happen internationally,” said Cullen Morgan, an equity derivatives trading expert at Goldman Sachs.

The projections suggest CTAs might unload up to $70 billion in equities just this week, with a more extensive potential selloff of $98 billion over the next month.

Limited U.S. Selling Completed

The bulk of CTAs’ activity concerning U.S. indices—such as the S&P 500, Nasdaq 100, and Russell 2000—has reportedly been executed already. Nonetheless, volatility-sensitive investors remain net sellers in this space.

If predictions hold, CTAs may collectively manipulate their positions to a $60 billion net short in global equities.

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