The Wall Street Journal-20080123-NYSE Short-Selling- Bearish Bets Rise 8-6- on the NYSE
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NYSE Short-Selling: Bearish Bets Rise 8.6% on the NYSE
Short interest rose at the New York Stock Exchange as recession fears spread and the market declined at the start of this year.
For the semimonthly period ending Jan. 15, the number of short- selling positions not yet closed out at the Big Board -- so-called short interest -- jumped 8.6% to 13,850,660,313 shares from 12,742,596,461 shares at the end of December.
Marketwide, the short ratio, or number of days' average volume represented by the outstanding short positions at the exchange, fell to 8.1 from 10.3 in late 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.
Over the period covered by the latest short-interest report, the Dow Jones Industrial Average lost 5.8% amid rising fears that the recent credit crisis could push the U.S. economy into recession.
Such market pullbacks increase the value of many bearish bets and often embolden short sellers to trade more aggressively.
The next NYSE short report is scheduled to appear Feb. 7 in The Wall Street Journal. The exchanges used to report such data monthly, but have gone to a twice-monthly reporting schedule. The next Nasdaq Stock Market report will be published in the Journal on Jan. 26.
