What is a 13F filings and how do traders use this information?

Spark Global Limited reports:

Stock traders and market analysts must wade through reams of SEC filings, but few are as important as the SEC 13F filings made by hedge funds and other institutional investment managers.

The reason you’ve been hearing about this filing lately is that Reddit’s wild trading has led to wild swings in some heavily shorted stocks like GameStop(NYSE :GME), Koss(NASDAQ :Koss), and AMC Entertainment (NYSE :AMC).

Let’s learn more about what traders on SEC Form 13F should know, including guidance on how to use it.

What is SEC Form 13F?
13F filings are quarterly reports that institutional investment managers must file with the SEC at the end of each quarter to disclose their investments in U.S. stocks.

All hedge funds, mutual funds, trust companies, registered investment advisers, pension funds and insurance companies with more than $100 million in assets under management are required to file 13F documents with the Securities and Exchange Commission.

But in July 2020, the SEC proposed a controversial plan to raise the disclosure threshold from $100 million to $3.5 billion.

The CSRC said it wanted to reduce the compliance burden on smaller INSTITUTIONAL investment managers while continuing to focus on the portfolios of large ones.

They also claim that the relative importance of managing $100m of assets has “declined dramatically” since the 13F form was introduced more than 40 years ago.

While 13F filings can be delayed by up to 45 days after the end of each quarter, they are closely watched by investors, traders, companies, analysts and rival investment managers as the most telling peak of a fund’s holdings.

Some of the best-known hedge funds include Point72 Asset Management, Candlestick Capital Management, Maplelane Capital, D1 Capital Partners, Melvin Capital and Citron Research.

What does SEC Form 13F contain?
Below is a non-exhaustive summary of what the file contains:

The name of the issuer of the securities owned by the Fund.
Description of the class of securities listed (e.g., convertible bonds, put/call options, common shares, Class A shares).
The number of shares held by the fund at the end of the quarter.
Fair market value of listed securities as of the end of the calendar quarter 13F filing.
Where can I find the SEC 13F form
Traders can find 13F filings for a U.S. hedge fund on the SEC’s EDGAR System corporate search site.

EDGAR, short for Electronic Data Collection, analysis and retrieval System, is a website that holds millions of personal and corporate documents.

Here, you can search for hedge funds that interest you under “Companies and people Find.”

You can also get 13F forms from online brokerage firms’ websites.