NEW YORK, June 9 (Reuters) - Short interest ticked up in late May, major exchanges said on Wednesday, suggesting bears became bolder as U.S. markets closed out their worst month in over a year.
After languishing since mid-March, short bets on the New York Stock Exchange have ticked up throughout May as Wall Street was hit by worries of spreading sovereign debt problems, profit-taking after a more than year-long run and the fallout from the so-called 'flash crash'.
Short interest on the New York Stock Exchange rose 0.6 percent in late May, according to the exchange. As of May 28, positions rose to about 13.99 billion shares, compared to a revised 13.91 billion shares as of May 14. This is equivalent to 3.66 percent of the total shares outstanding.
For the month overall, short bets rose 1.1 percent. At the same time, the S&P 500 tumbled about 8 percent and fell into an official correction, its first since the rally began in March 2009. May was the worst month for the index since February 2009.
'The market was priced for perfection. We were going to have this nice steady growth, low volatility and low interest rates. The problem is perfection didn't show up,' said Bill Strazullo, partner and chief investment strategist at Bell Curve Trading in Boston.
'You have all these issues that are hanging over the market that's going to manifest itself in more shorts and a more defensive tone to the market.'
On the Nasdaq, short interest rose 0.5 percent to about 7.21 billion shares, compared to 7.18 billion shares in the same time frame. This is 2.69 days' average daily volume, compared with an average of 2.34 days for the previous reporting period, the exchange said.
Investors who sell securities 'short' seek to profit from betting stocks will fall. Short-sellers borrow shares and then sell them in the hopes of buying them back at a lower price, pocketing the difference.
Even so, short bets are well off the high levels seen during the financial crisis of 2008. Bearish investors have also been wary of taking risky bets after being squeezed out during the market rally through much of 2009 and early 2010.
(Reporting by Leah Schnurr; Editing by Kenneth Barry) Keywords: MARKETS SHORTINTEREST/NYSE (leah.schnurr@thomsonreuters.com; +1-646-223-6026; Reuters Messaging: leah.schnurr.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. 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.
After languishing since mid-March, short bets on the New York Stock Exchange have ticked up throughout May as Wall Street was hit by worries of spreading sovereign debt problems, profit-taking after a more than year-long run and the fallout from the so-called 'flash crash'.
Short interest on the New York Stock Exchange rose 0.6 percent in late May, according to the exchange. As of May 28, positions rose to about 13.99 billion shares, compared to a revised 13.91 billion shares as of May 14. This is equivalent to 3.66 percent of the total shares outstanding.
For the month overall, short bets rose 1.1 percent. At the same time, the S&P 500 tumbled about 8 percent and fell into an official correction, its first since the rally began in March 2009. May was the worst month for the index since February 2009.
'The market was priced for perfection. We were going to have this nice steady growth, low volatility and low interest rates. The problem is perfection didn't show up,' said Bill Strazullo, partner and chief investment strategist at Bell Curve Trading in Boston.
'You have all these issues that are hanging over the market that's going to manifest itself in more shorts and a more defensive tone to the market.'
On the Nasdaq, short interest rose 0.5 percent to about 7.21 billion shares, compared to 7.18 billion shares in the same time frame. This is 2.69 days' average daily volume, compared with an average of 2.34 days for the previous reporting period, the exchange said.
Investors who sell securities 'short' seek to profit from betting stocks will fall. Short-sellers borrow shares and then sell them in the hopes of buying them back at a lower price, pocketing the difference.
Even so, short bets are well off the high levels seen during the financial crisis of 2008. Bearish investors have also been wary of taking risky bets after being squeezed out during the market rally through much of 2009 and early 2010.
(Reporting by Leah Schnurr; Editing by Kenneth Barry) Keywords: MARKETS SHORTINTEREST/NYSE (leah.schnurr@thomsonreuters.com; +1-646-223-6026; Reuters Messaging: leah.schnurr.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. 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.