Better watchout for squeeze. NYSE Short Selling Hits Record Again
By CASSELL BRYAN-LOW
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Short-selling activity on the Big Board hit a record for the fourth consecutive month, signaling that investors placed bets that last month's stock market gains would be short-lived.
Statistics released Thursday showed that short interest on the New York Stock Exchange, or short-selling positions that aren't yet closed out, rose 1.2% to 5,577,217,366 shares in the month through June 15, from 5,512,609,817 shares on May 15.
See complete short interest figures from the New York Stock Exchange and the American Stock Exchange.
On the American Stock Exchange, owned by the National Association of Securities Dealers, the short-interest figure fell 0.98% to 291,095,414 shares from an adjusted 293,964,951 shares in mid-May. The most recent figures for the NYSE and Amex reflect transactions through June 12, allowing extra days to complete settlement.
The stock market climbed through most of May, peaking late in the month before giving back most of those gains and continuing its decline in recent weeks. For the month of May, investment returns of short-only money managers were down 2.6%, according to an index compiled by Harry Strunk, an investment adviser in Palm Beach, Fla., who surveys professional short sellers.
Investors who sell securities "short" borrow stock and sell it, betting that the stock's price will fall, and that they will be able to buy the shares back later at a lower price for return to the lender.
Short interest often is considered an indication of the level of skepticism in the market. Short interest reflects the number of shares that have yet to be repurchased to give back to lenders. In general, the higher the short interest, the more people are expecting a downturn.
Some investors will allocate part of their portfolio to a professional short seller to hedge, or protect, their assets in case the market falls. Investors also may rely on short selling for other purposes, including a hedging strategy related to corporate mergers and acquisitions, hedging convertible securities and options, or tax-related reasons.
The next NYSE short-sales-outstanding report will be published in The Wall Street Journal on July 20.
Write to Cassell Bryan-Low at cassell.bryan-low@wsj.com |
