NYSE Short Interest Hits Another Record

Short interest on the NYSE rose 2.7% during the first half of July to 18.61 billion shares and represents another record high going back to 1931.  Over the last year, short interest on the NYSE has risen by 43.7%.  As a percentage of total shares outstanding, 4.7% of all shares on the NYSE are currently sold short. 

While some may interpret this data as a sign that SEC Chairman Cox's supposed crackdown on short selling hasn't worked, we would note that the data is as of July 15th (settlement date).  Therefore, given the fact that most equity trades settle three business days after the trade date, in order to be reflected in the most recent report, trades would have had to been executed no later than July 10th.  The month-end report should be interesting.

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Comments

[maelstrom]

Oh God ...more good news

[Andy Cole]

Good information, thanks!

[ValueInvestor]

Its expected. While all the talking heads in Wall Street are saying "there's no recession coming" what they're really saying is "Well I'm short because I know there really is a recession coming, but I need someone on the other side of the trade, so I'll make it appear that I'm long."

Anyone betting on a recession (which I think a lot are) will be net short, so a recession should indicate a higher short interest than normal, and since we havent seen a recession in a while its expected.

[Bermuda Benny]

I have always found that the shorts as a group are smarter than the longs. But this is a good contrarian indicator.