Retail real estate might be going through a rough patch, but not quite rough enough for investors betting against the health of malls and shopping centers.

Such investors have been practicing a variation on short selling, which is generally associated with equity stocks, but can be done by betting on indexes that track baskets of CMBS with exposure to malls. Hedge funds have been particularly keen on this kind of shorting recently, Bloomberg reports.

One such index is the Markit CMBX Series 6, a tradable synthetic credit default swap index introduced in 2012 that references a portfolio of CMBS. The CMBX Series 6 deals were issued in the post-recession environment of 2012.

That was a time when retail seemed to be recovering from the worst of the recession, but before the current realignment of the retail business was underway. Investors who take short positions on such an index are betting that the current state of the retail market will result in more defaults of the underlying CMBS loans before they can be refinanced in 2022.

Last year, that index was down, but during the last 12 months, it has risen as retail property owners on the whole have been unexpectedly fending off defaults.

As retail performs better than expected, the cost of premiums to maintain short positions add up, Bloomberg reports. The question then becomes which will last longer — investors' willingness to maintain their short positions, or the unexpected health of the retail sector.

Some investors are betting the other way — that malls will indeed do better than expected. The Wall Street Journal reports that Putnam Investments money manager Brett Kozlowski has been selling a different sort of swap related to CMBX. When prospects for weaker malls improve, and they manage to make their debt payments, his funds profit from it.