NYSE and Amex Short-Selling: Short-Selling Activity Soars on NYSE
Short-selling activity soared at the New York Stock Exchange in the first half of March.</br></br>For the twice-monthly reporting period ended March 14, the number of short-selling positions not yet closed out at the Big Board -- so- called short interest -- jumped 7.04% to 16,009,687,994 shares, from 14,956,961,052 shares in late February.</br></br>Marketwide, the short ratio, or number of days' average volume represented by short positions outstanding at the exchange, fell to 3.5 from four at the end of last period, as volume soared. The figures are based on trading in NYSE-listed names across all exchanges.</br></br>Investors who "short" shares borrow and sell them, betting the price will fall and they will be able to buy the shares later at a lower price for return to the lender. In general, the higher the short interest, the more investors expect a downturn. Downdrafts tend to boost the value of short positions and embolden bearish investors.</br></br>Recent volatility in the stock market, in particular among bank and financial shares, has benefited short sellers who placed well-timed bets on the right companies, said Harry Strunk, a principal at Treflie Capital Management in New York. Mr. Strunk surveys a group of short- only managers on a monthly basis; the value of the average short- selling portfolio gained 12.5% in the first two months of 2008, compared with 18.4% for the first three months of 2001, according to Treflie data.