Short Selling Gambles Increase as Markets Gyrate

Short sellers appear to believe that the gyrations in the market will, on balance, bring the indices down. And some stocks, they are willing to gamble, will fall significantly. Their bets on banks are already good, according to data for the period that ended August 15.

The short interest in Wells Fargo (NYSE: WFC) rose 39% to 51.1 million shares. Short interest in JPMorgan (NYSE: JPM) was up by 38% to 46.3 million shares. Shares short in Bank of America (NYSE: BAC) rose 8% to 141.9 million shares. The financial firm continues to be one of the most shorted stocks, based on volume.

Short sellers also held their positions in companies that are considered to have weak prospects. Shares short in Sprint-Nextel (NYSE: S) were 90.6 million, among the top 10 most shorted stocks traded on the NYSE. The short interest in Nokia (NYSE NOK) also remained in the top 10 at 100 million. Shares short in Ford (NYSE: F), which has lost half of its market value this year, remain near 146 million. Short interest in chip company also-ran AMD (NYSE: AMD) remained in the top 10 at 102.6 million shares. Another stock in the top 10 is dying Eastman Kodak (NYSE: EK) the shares of which are short by 81 million.

Bets against many tech stocks rose. Short interest in Intel (NASDAQ: INTC) was higher by 73% to 173.4 million. Shares short in Microsoft (NASDAQ: MSFT) rose 12% to 83.2 million. Shares short in Oracle (NASDAQ: ORCL) were up 58% to 34.6 million. The short interest in troubled Cisco (NASDAQ: CSCO) stayed high at 73.5 million shares.

Data is from NYSE and Nasdaq.

Douglas A. McIntyre