Short Interest Continues to Rise

While yesterday's rally in the stock market may just have been another short covering rally, based on the final short interest data for February (NASDAQ numbers were released after the close yesterday), there may be a lot of shorts to cover. While the short interest ratio (short interest divided by average volume) is one widely quoted measure of short interest, we also track short interest versus a stock's float, as it gives a clearer picture of what percentage of a company is sold short.

In the chart below, we calculate the average short interest of all the stocks in the S&P 1,500 as a percentage of the total float of those stocks. As shown, over the last year short interest in the S&P 1500 has risen by over 45% from 6.68% of the total float to 9.93% as of February 29th.

click to enlarge

Comments

[Stephen Ros...:]

At some point, these huge short positions will get squeezed and create more of the 400+ days.
These shorts are also responsible for paying hefty dividends. As the prices of shares have tumbled, their dividend payments as a % of price have gone alot higher. It's one thing shorting a bank with a 3% dividend; its another being responsible for paying 5% or more.

2008 Mar 12 01:46 PM

[Leser:]

Do you think the dividends at the financials will be cut?

2008 Mar 16 11:09 AM