By Ellis Mnyandu
NEW YORK, Nov 24 (Reuters) - Short interest on the New York Stock Exchange and Nasdaq edged higher in early November, data from the exchanges showed on Tuesday, signaling that some investors are betting the equity run-up might hit some turbulence as 2009 winds down.
While this year may go down as one of the worst for short-sellers -- investors who seek to profit by betting stocks will fall -- the growing unease about the pace of the economic recovery may provide some solace.
If there is an absence of more positive news about the recovery, analysts expect short interest to bounce further in the weeks ahead.
Short-sellers 'are probably going to start getting more bold toward the end of the year, especially with the negative news that's been coming out,' said Harry Strunk, principal at Treflie Capital Management in West Palm Beach, Florida.
'I think the short-sellers are kind of just waiting in the wings for this negative news that's coming. They had the best start ever and then everything just blew up on them. They've had a real roller-coaster.'
The NYSE reported its short interest rose 2.3 percent to about 13.18 billion shares as of Nov. 13 from 12.88 billion shares as of Oct. 30. Short interest was equal to 3.45 percent of total shares outstanding.
Short interest on the Nasdaq rose 2.1 percent to about 6.5 billion shares as of Nov. 13, from 6.36 billion shares as of Oct. 30. The Nasdaq said that represented 2.75 days average daily volume, compared to an average of 2.89 days for the previous period. For details, see
But short-sellers are still likely to be cautious, especially with U.S. dollar weakness continuing to drive bullish bets on riskier assets like stocks and the U.S. Federal Reserve committed maintaining ultra-low interest rates to foster a rebound.
Year-to-date, short-sellers have a negative return of 29.2 percent, which puts 2009 on track to possibly be one of the worst years ever, according to Strunk. 'They are probably waiting to see what the holiday numbers look like for consumer confidence,' he added.
By comparison, the benchmark S&P 500 index is up 63.4 percent from its 12-year closing low of March 9.
Investors who sell securities short seek to profit from bets the stocks will fall. Short-sellers borrow shares and then sell them with the hope of buying back the share at a lower price, pocketing the difference.
(Additional reporting Leah Schnurr; Editing by Leslie Adler) Keywords: MARKETS SHORTINTEREST/NASDAQ (Ellis.Mnyandu@thomsonreuters.com; +1 646 223 6085; Reuters Messaging:ellis.mnyandu.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Nov 24 (Reuters) - Short interest on the New York Stock Exchange and Nasdaq edged higher in early November, data from the exchanges showed on Tuesday, signaling that some investors are betting the equity run-up might hit some turbulence as 2009 winds down.
While this year may go down as one of the worst for short-sellers -- investors who seek to profit by betting stocks will fall -- the growing unease about the pace of the economic recovery may provide some solace.
If there is an absence of more positive news about the recovery, analysts expect short interest to bounce further in the weeks ahead.
Short-sellers 'are probably going to start getting more bold toward the end of the year, especially with the negative news that's been coming out,' said Harry Strunk, principal at Treflie Capital Management in West Palm Beach, Florida.
'I think the short-sellers are kind of just waiting in the wings for this negative news that's coming. They had the best start ever and then everything just blew up on them. They've had a real roller-coaster.'
The NYSE reported its short interest rose 2.3 percent to about 13.18 billion shares as of Nov. 13 from 12.88 billion shares as of Oct. 30. Short interest was equal to 3.45 percent of total shares outstanding.
Short interest on the Nasdaq rose 2.1 percent to about 6.5 billion shares as of Nov. 13, from 6.36 billion shares as of Oct. 30. The Nasdaq said that represented 2.75 days average daily volume, compared to an average of 2.89 days for the previous period. For details, see
But short-sellers are still likely to be cautious, especially with U.S. dollar weakness continuing to drive bullish bets on riskier assets like stocks and the U.S. Federal Reserve committed maintaining ultra-low interest rates to foster a rebound.
Year-to-date, short-sellers have a negative return of 29.2 percent, which puts 2009 on track to possibly be one of the worst years ever, according to Strunk. 'They are probably waiting to see what the holiday numbers look like for consumer confidence,' he added.
By comparison, the benchmark S&P 500 index is up 63.4 percent from its 12-year closing low of March 9.
Investors who sell securities short seek to profit from bets the stocks will fall. Short-sellers borrow shares and then sell them with the hope of buying back the share at a lower price, pocketing the difference.
(Additional reporting Leah Schnurr; Editing by Leslie Adler) Keywords: MARKETS SHORTINTEREST/NASDAQ (Ellis.Mnyandu@thomsonreuters.com; +1 646 223 6085; Reuters Messaging:ellis.mnyandu.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.