NYSE Short Interest Hits Record Highs... Again

Yesterday, the NYSE and NASDAQ both released short interest statistics for the month ending in June, and for each exchange, short interest levels increased.  On the NYSE, short interest rose to yet another record high, up 2.67% to 18.125 billion shares.  Looking at figures for the S&P 500, short interest as a percentage of float for the average stock rose from 5.8% to 6.0% of float.

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A look at the stocks in the S&P 500 with the highest short interest shows exactly where the trouble lies—Consumer Discretionary and Financials.  Of the twenty stocks with the highest short interest as a percentage of float, seventeen of them come from those two sectors.

Comments

[Medici:]

Doesn't seem to be a contrarian indicator any more-

2008 Jul 11 09:05 AM

[Consider_this:]

Wow!

53% of shorts vs float!!! More than half of the list is > 25%!!!

Anyone need more evidence that bears are going to be burnt to a crisp soon? It's like a fire hazard by piling on dry twigs on a hot summer -- and the shorts are the dry twigs!

I'm a contrarian, I shorted before anyone shorted. This kind of statistics will make me run far far away from shorting these.

2008 Jul 11 10:20 AM

[Felisrufa:]

The large rise in short interest is in part the result of last years ruling by the SEC. They reversed the Uptick Rule. this rule was created created to help prevent another depression. Thank you Bush.

2008 Jul 11 04:08 PM

[Ames Tiedeman:]

GM: One sad American story. Now they are shorting it even under 10.00. Horrible.

2008 Jul 11 04:33 PM

[ZenInvestor:]

I agree that the uptick rule elimination has exacerbated the problem. It is a mystery to almost everyone why it was eliminated, but it needs to be restored. One of the reasons is to 'protect' people who in the current market have become addicted to shorting stocks and will suffer losses if the market suddenly turns UP. It was a reasonable rule and one that should be reinstated.

2008 Jul 12 08:48 AM

[Roudy:]

This is jut to let Market Watch publishers how much I enjoy that they make these articles short, to the point, and easy to understand. I hope they keep up the good work. RoudMan

2008 Jul 12 08:58 AM

[Roudy:]

I meant to say "Seeking Alpha" publishers instead of MarketWatch. Forgive me as I am getting old.RoudMan

2008 Jul 12 09:01 AM

[truthinvesting:]

Quit blaming Bush for the uptick rule.the fact is the ceos of financials are to blame.4 or 5 people on my forum are all ahaed for the year

2008 Jul 12 11:33 AM

[truthinvesting:]

sorry forgot to say this is a good article and proves we are getting near the bottom

2008 Jul 12 11:34 AM

[Mr. Stupid:]

well ETFC shorts will soon be crying....ETFC is primed for a run even with financial worries.

2008 Jul 12 02:15 PM

[Jimmy Goodwin:]

ETFC below $3.50 is bankruptcy level.

I'm surprised it has been losing so little the past few days when compared to the market. The news coming out is the worst E*Trade could have hoped for. Could hit below $1 before ETFC even get to its results day.

2008 Jul 12 10:15 PM

[Jimmy Goodwin:]

Still, I'm long ETFC, great company if they survive, ETFC take up 9% of my portfolio, I'm up around 5% this year, so worth a 4% gamble imo.

2008 Jul 13 04:52 PM

[Ben Williams:]

Look for ETFC to run up around 5 to 6% at market opening, Don't think bankruptcy is in the future of this company as $1 Billion dollars in capital is being raised by year end to cover any of the bad mortage business they still have on books, and their core business is thriving once again.

2008 Jul 14 09:29 AM

[Jimmy Goodwin:]

If the second largest financial institution can fail, E*trade easily can.

2008 Jul 14 01:02 PM

[Ben Williams:]

ETFC up over 20% today. Back in $3 plus territory, very positive. Earnings to be released next week which will give a good indication of where this stock is headed. I am riding this one up or down, either way it is a good speculative stock in my humble opinion.

2008 Jul 16 03:49 PM

[Ben Williams:]

Closed yesterday up around 25% and looks like anothere 5 to 10% upswing today. Lets hope this momentum carries through and that the estimated loss on next Tuesday's earning reports is not greater than expected. If not, the stock should at least be on solid ground if not going up some more as the past two days have been.

2008 Jul 17 02:14 PM

[Mr. Stupid:]

Jimbo Goodwin.....E-trade going bankrupt?... Have you even been following the news..Yes bigger banks have gone bankrupt but they carry a substantially larger mortgage portfolio than etrade. Plus E-trades core business is in the upswing. Maybe i'm wrong but I think E-trade will be a turn-around success story for 2009.

2008 Jul 19 01:49 AM

[Mr. Stupid:]

If etrade was going to file bankruptsy I think they would have done this when they were the most vulnerable, back in October 2007. They are expected by analyst to be cash flow positive in 2009 and with the sale of non-core assets they are going in that direction maybe even sooner than the conservative analyst predict.

2008 Jul 19 01:53 AM

[Mr. Stupid:]

Oh Yeah...last year etrade did approx 2.2B in revenue. In the first quarter this year they did almost one billion revenue...Do the math, they will be cash positive in the near future and the market will act favorably to etrades trade value.

2008 Jul 19 12:28 PM

[Mr. Stupid:]

Let me add with their portal access going to smartphones trading revenue will only go up...Imagine being able to trade on the go with your smartphone....WOW...an... to the best of my knowledge they are the only and first ones to put this into action.

GO E-TRADE....

2008 Jul 19 12:32 PM