The Wall Street Journal-20080111-Nasdaq Short-Selling- Short Interest Declines at Nasdaq
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Nasdaq Short-Selling: Short Interest Declines at Nasdaq
Short interest fell at the Nasdaq Stock Market in late December amid a modest gain in technology shares.
For the semimonthly period ended Dec. 31, 2007, the number of short- selling positions not yet closed out at Nasdaq -- so-called short interest -- fell 2% to 8,112,753,852 shares from 8,280,539,309 shares for the period ended in mid-December.
Marketwide, the short ratio, or number of days' average volume represented by outstanding short positions at the exchange, rose to 5.0 from 4.1 in mid-December.
Investors who "short" shares borrow them and sell them, betting the price will fall and they will be able to buy the shares later at a lower price for return to the lender. In general, the higher the short interest, the more investors expect a downturn.
The tech-focused Nasdaq Composite Index edged up 0.6% during the period covered by the latest short-interest report. It is typical for short sellers to lock in profits when the market goes up. The decline in short interest also was accentuated as some investors didn't want to carry short positions into the new year, said Harry Strunk, managing director of Aspen Grove Capital Management.
The next Nasdaq short report is scheduled to appear on Jan. 26 in The Wall Street Journal. The exchanges used to report such data monthly but have gone to a twice-monthly reporting schedule. The next New York Stock Exchange report will be published on Jan. 23.
