Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (1603)	9/21/2001 4:00:52 PM
From: stockman_scott	Respond to of 8752

An interesting perspective on shorting the market... Message 16394891

To: Jim Willie CB who wrote (1603)	9/21/2001 6:24:46 PM
From: stockman_scott	Read Replies (1) \| Respond to of 8752

NYSE short interest makes new high in September NEW YORK, Sept 21 (Reuters) -- Short interest on the New York Stock Exchange, the world's largest equity market, rose to a record 5.98 billion shares in the month ended September 13, the Big Board said on Friday. This was an increase of 74.8 million shares from the 5.91 billion shares sold short in the period ended Aug. 15, and represented 1.8 percent of the total shares traded on the exchange, the NYSE said. The September 13 month reflects transactions through September 10 -- the day before the attacks on the World Trade Center and the Pentagon. September is the seventh consecutive month this year in which short interest has reached a new high, starting with March. The September figure of 1.8 percent for the proportion of shares traded on the NYSE is marginally higher than the 1.7 percent recorded in preceding months such as August, July, June, and May. The aggregate short position figures tell little about the direction of the market because "the intra-monthly change is so insignificant," said Manuel Asensio, president of Asensio & Co., an investment bank that engages in short selling. Also, "the quality of the information has always been suspect" because the short-interest figures include "all sorts of unrelated trades" and because "certain trades are reported and certain are not," he said. Stocks "go down with lots of short interest, just like they go up with lots of short interest," Asensio said. "It's a technical number that should not be looked at by investors." The numbers this month are even less relevant to market watchers because they cover the period immediately preceding the September 11 attacks, which have had an enormous impact on stocks, he said. Asensio currently holds short positions in VeriSign Inc. <VRSN.O>, NVidia Corp. <NVDA.O>, and PolyMedica Corp. <PLMD.O>, he said. VeriSign, which manages domain names and provides e-commerce services, is "trading at 100 times projected earnings and those earnings are highly suspect," he said. NVidia, a maker of advanced graphics chip technology, "is up on speculation of being a dominant player in graphics, which has always been an area with a lot of competition and low margins," Asensio said. A subsidiary of PolyMedica is the subject of a federal criminal investigation, he noted. Short sellers opened positions of 100,000 or more shares for companies including AirTran Holdings Inc. <AAI.N>, AmeriSourceBergen Corp. <ABC.N>, Enbridge Energy Partners LP <EEP.N>, and FTI Consulting Inc. <FCN.N>. Short selling is when investors sell borrowed shares with the hope of buying back the stock at a lower price, returning the stock and profiting from the difference. If stocks start to rally, short sellers are often forced to buy back into the market to reduce losses, propelling prices even higher. A drop in short interest may indicate some investors anticipate a rally, while a rise may show some investors expect a decline in stocks. The following is a table of the 10 biggest short positions held for the month ended September 13, ranked in descending order: COMPANY SHORT POSITION (in millions) Sprint PCS Group 128.2 Lucent Technologies 118.8 Global Crossing 114.2 Cendant Corp. 102.8 Nortel Networks 70.5 Motorola 67 AOL Time Warner 61 Rite Aid 58.9 AT&T 56.1 Walt Disney 49.1 ((--Per Jebsen, Wall Street Desk, (646) 223-6152, per.jebsen@reuters.com)) REUTERS * end of story *