bill and all:
an article from the oct 25 ny times. please excuse ugly formatting (i'm in netscape instead of msie right now).
October 25, 1997
Short Positions Not Yet Covered Are Up 7.1
Percent on Nasdaq Market
NEW YORK -- In the largest increase since October 1993, the number of open
positions on short sales on the Nasdaq stock market rose 7.1 percent in the
month ended Oct. 15, the National Association of Securities Dealers reported
Friday.
The short positions in Nasdaq shares, which represented trading that took place
from Sept. 15 through Oct. 10 and was settled as of Oct. 15, totaled 1.691 billion
shares. That compared with 1.578 billion in the monthly period ended Sept. 15.
The increase between September and October 1993 was 7.4 percent.
In a short sale, investors borrow shares from a brokerage firm and sell them, hoping
to repurchase them later at a lower price and return them to the firm. If the shares
fall in price, an investor makes money by keeping the difference between the price
at which the stocks were sold and the lower price at which they were repurchased.
Short sales have typically been considered a measure of bearish sentiment. But they
are now often employed in complex hedging and trading strategies involving options
futures and other derivatives.
While the number of open positions -- shares sold but not yet bought back -- on
short sales rose in the latest monthly period, the number of days to cover all short
positions, based on daily share volume for the month, declined by 7.8 percent. The
October short interest represented 2.30 days of daily market share volume,
compared with 2.51 for September.
The largest increases in short positions were in the shares of Worldcom Inc., with
70.26 million, up from 44.49 million; Intel Inc., with 32.44 million, up from 24.74
million; Tele-Communications Inc., with 32.44 million, up from 24.74 million, and
Ascend Communications Inc., with 22.09 million, up from 19.7 million.
Short interest in the 1,477 stocks traded on the small-capitalization market of
Nasdaq declined 2.2 percent, to 52.07 million shares from 53.29 million. |
