We have an unlikely candidate leading the rally over on the New York Stock Exchange today. Shares of Security Capital Assurance are the biggest percentage gainer on the NYSE, jumping more than 20% at last check. However, while the stock has only gained $1.13 per share on the day, that means quite a bit to an equity trading in the $6.50 per share range.
Unfortunately for SCA, the shares used to scoff at such small dollar moves but that was before the subprime and credit crunch debacles. Seemingly overnight, SCA went from trading in the $34 area with a bullet higher to slouching in the $5 and $6 range. Naturally, short sellers have jumped all over this equity, pushing the short-to-float ratio to more than 46% of NYT's outstanding shares. While this bearish contingent is certainly in no rush to go anywhere fast, today's speculation of a Federal Reserve rate cut could provide a bit of ballast. There is always room to fall further, but if SCA can stay in business, the stock could once again return to the double digits it just depends on how long you are willing to wait.