NYSE short interest rises in mid-November

NYSE short interest rises in mid-NovemberReuters Wednesday November 21 2007

By Emily Chasan

NEW YORK, Nov 21 (Reuters) - Short interest on the New York Stock Exchange rose 3.8 percent in mid-November, the exchange said on Wednesday, suggesting an increase in bearish sentiment in the stock market.
The increase represented the largest rise in short interest since mid-July.
As of Nov. 15, short interest rose to about 12.39 billion shares, compared with 11.93 billion shares as of Oct. 31.

Short interest as of Nov. 15 was equal to about 3.3 percent of the total shares outstanding on the NYSE, the exchange said.
Investors who sell securities "short" profit from betting that stocks will fall. Short-sellers borrow shares and then sell them, waiting for the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference.

NYSE short interest has been inching back toward its July record of 12.95 billion shares as investors worried financial services firms could suffer even more credit losses amid the fallout from the housing slump.
"The shorts sold a staggering amount of stock - unloading huge volumes of shares, which have weighed heavily on the overall market," said Dylan Wetherill, president of ShortSqueeze.com, a Web site that tracks short interest data.
"They profit from the dramatic price drop we have seen."
The Dow Jones industrial average <.DJI> has fallen more than 8 percent since the end of October.

From the beginning of 2007 through the end of October short seller portfolios were up 0.81 percent on average, compared with 0.61 percent through September, according to Treflie Capital Management. The investment firm publishes a short selling index once a month. (Reporting by Emily Chasan; editing by Andre Grenon and Carol Bishopric)