Friday, June 20, 2008

NYSE Short Interest at a Record High

Yesterday the NYSE released its mid-month short interest report for June. Since the end of May, short interest on the NYSE has grown by 7%. This is the third time in 2008 short interest has increased by more than 5%.

Historically short interest in the market has been considered a contrarian indicator, but during the past few years the emergence of hedge funds and long/short funds has somewhat skewed the numbers. In the end, short positions are usually held by "short term" or "day" traders, and they are much more inclined to move quickly to cover a short position and lock in any profit or loss than a long term investor. Thus, even as the numbers on the short side grow, the end result should be a market that at any point could turn and have the shorts covered. Any momentum to the upside could bring a dramatic move to cover these shorts. This one issue should be seen as something that should provide a bit of cushion.

The NYSE Press Release - link:


NYSE Group Inc. Issues Short Interest Report

New York, June 19, 2008--The NYSE Group, Inc. today reported short interest as of the close of business on the settlement date of June 13, 2008.

Based on information received from members and member organizations, short interest increased to 17,654,028,383 from 16,431,281,684 shares on May 30, 2008. This is an increase of 1,222,746,699 shares and is an all time record.

The short interest on June 13 was equal to 4.6 percent of the total shares outstanding.

The short interest in warrants as of June 13 amounted to 1,012,976 warrants, compared to 1,153,676 warrants the previous period.

As of the settlement date, there were 3,715 stocks and 10 warrants available for trading. Of these, 3,172 issues had either a short position of at least 5,000 shares or a change of 2,000 shares since the last monthly report.

A short sale is any sale of a security that the seller does not own or any sale that is completed by the delivery of a borrowed security.

No comments: