Short Interest Hits New Record High On NYSE

Hickey and Walters (Bespoke) submit: NYSE short interest rose 6% in June to another record high. While the increased influence of hedge funds over the last several years has made short interest a less important indicator, it is still important to note that over the last four months short interest has increased by 30%.

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Comments

[Jorge Piedr...:]

I do not think that short interest numbers provide much information nowadays -- the proliferation of derivatives that may be linked to short positions in stocks and not necesarily to short positions in the market makes it difficult to figure out the meaning of the numbers.

In addition, convertibles, market neutral funds, etc. creat a short position while creating a long one at the same time with no price implication when it gets unwound.

There are enough equities arround for everybody that wants one -- i.e. no short squeeze or melt-up.

2007 Jun 22 05:47 AM

[peetieweetie:]

no meltup supported by extreme level of short interest? Why not check out Bernie Schaeffer's view on the subject at Schaeffer's Research.

2007 Jun 22 10:23 AM

[John O:]

Bernie Shaeffer's in the business of marketing for mass consumption. He never made a nickle trading Stock and certainly never had to be right in an options position.

Piedra is correct

John

2007 Jun 22 11:01 AM

[John Gaats:]

I think Duke University has some seminar papers distinguising short sales and stock fundamentals.

2007 Jun 22 11:20 AM

[wixeywaxy:]

The question I have is how much of the hedge fund shorting has been naked? This problem is being swept under the table by the SEC although there has been complaints largely ignored by the media. If some hedge funds have raised substantial funds naked and subsequently invested those funds in the market, the short position likely won't be profitable enough to offset the loss on their long positions in a down market. We could see some nasty devistation caused by hedge fund bankruptcies and the insurerers of the brokerage industry may be slow in reimbursing the people who are long on the side opposite the naked shorts. We had just better hope their isn't a Oct 1987 incident comin around again. Vic

2007 Jun 22 02:10 PM

[Solution:]

Since market is so volatile, I bought both QLD and QID, SSO and SDS, DDM and DXD, tried to profit both sides. Does this contribute to the short interest ?

2007 Jun 22 07:52 PM