Short interest in Nasdaq-listed stocks climbed 3.4% in the
second half of May from the first part of the month, while the
figure rose a more modest 2.2% on the New York Stock Exchange,
according to the exchanges' semimonthly statistics.
Nasdaq's short interest totaled 7.25 billion shares of 2,812
Nasdaq securities as of May 31, up from 7.01 billion shares from
2,815 securities as of May 13. The short ratio, or the number of
days' average volume represented by outstanding share positions,
rose to 3.65 days from 3.29 days.
The exchange is part of Nasdaq OMX Group Inc. (NDAQ).
Meanwhile, NYSE Euronext's (NYX) exchange reported short
interest grew to 13.22 billion shares on its stocks, up from a
revised 12.94 billion. The latest volume represents about 3.5% of
the total number of shares outstanding.
Investors who short shares first borrow shares and then sell
them, betting that the prices of shares will fall so the stock can
later be repurchased at a lower price for return to the lender.
Stocks can also be shorted for reasons other than bearish bets,
including hedging strategies.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com