It takes a certain kind of courage to short sell blue chips, such as the Dow Jones industrial average components. Short sellers are betting on these companies to fail, or at least for their share prices to fall handily. Plus, those sellers are responsible for paying the dividends on the stocks they short.

Maybe it is little surprise that only three of the 30 Dow stocks had sizable short interest between July 31 and August 14; that is, more than 40 million shares short. Almost half of the index’s components had short interest of more than 20 million shares.

With the pandemic showing no signs that it will fade anytime soon, and a contentious election coming up, investors have been trying to figure out what to do next. They may wonder then what the short sellers have expected from some of the biggest, most well-respected names on Wall Street. As far as Dow stocks were concerned, short sellers seemed to head for the exits earlier this month, as the markets approached all-time highs again.

As of the middle of the month settlement date, the most recently reported period, short sellers still favored Pfizer Inc. (NYSE: PFE), Exxon Mobil Corp. (NYSE: XOM) and Intel Corp. (NASDAQ: INTC) above all other Dow stocks. Note though that both Exxon and Pfizer are scheduled to leave the Dow at the end of the month.

Pfizer

> Shares short: around 50.22 million
> Change from prior period: −6.1%
> Percentage of float: 0.9

This sizable rise in the number of Pfizer shares short in the prior period was partly reclaimed, but the pharmaceutical leader remained at the top spot on the list. It also is still below the year-to-date high of around 61 million shares short seen back in January. At the average daily trading volume on the latest settlement date, the days to cover figure was still less than two.

Shares of this maker of Lipitor, Viagra and Xanax have lagged, despite it being a frontrunner in the race for a COVID-19 vaccine. Its share price ended the first half of August about 1% lower, after spending most of the period in the red. The S&P 500 rose more than 3% during the short interest period.

Pfizer stock closed most recently at $38.41 per share, after a marginal gain in the past week. The 52-week low of $27.88 was seen in March, and the 52-week high of $40.97 was reached early this year. The shares now trade about 2% lower than they did at the beginning of the year but are up over 32% from the March low.

Exxon

> Shares short: around 41.80 million
> Change from prior period: −13.9%
> Percentage of float: 1.0

The rate at which short interest in the oil supermajor shrank increased in the first half of this month, but the stock clung to the second spot on the most shorted Dow components list. At the average daily volume on the latest settlement date, it would take investors about two days to cover their short interest.

Exxon posted quarterly results at the beginning of the period that were not as bad as they could have been. Short sellers watched the share price rise more than 10% in those two weeks but then retreat to end the period with a gain of less than 3%. Note that the Dow ended the first half of this month almost 6% higher.

After a pullback of over 3% in the past week, Exxon Mobil stock closed trading most recently at $40.89 a share. That was in a 52-week range of $75.18 (last September) to $30.11 (in March). The most recent share price is about 29% higher since the year-to-date low in March, compared to more than a 49% gain in the S&P 500 in that time.

> Shares short: more than 41.77 million
> Change from prior period: −2.2%
> Percentage of float: 1.0

Short interest slipped from its highest level since mid-March but, here too, the semiconductor leader remained in its position on the list despite the overall trend in the first two weeks of August. The number of shares short sank to a 52-week low in mid-July. The average daily trading volume plunged in the most recent period, and the days to cover figure ticked up to above one.

Intel tried to ease concerns about it during the period by announcing a new chip production method. Intel shares ended the two weeks trading over 2% higher, though they had been up about 4% earlier in the period. The Nasdaq saw a gain of around 3% between the latest settlement dates.

Intel stock was last seen trading at $49.43 a share. While that is up from the 52-week low of $43.63 from earlier this year, it is well off the $69.29 52-week high. The latest share price is down more than 17% since the beginning of the year, while the Nasdaq has gained more than 27% in that time.

And the Rest

Rounding out the top five most shorted Dow stocks on the most recent settlement date were Verizon Communications Inc. (NYSE: VZ) and Cisco Systems Inc. (NASDAQ: CSCO). The share price of the former rose marginally earlier this month, while the latter saw a notable pullback after disappointing earnings. Yet, the number of shares short decreased for both of them during the period.

On the following list of short interest changes in the Dow stocks as of August 14, note that American Express Co. (NYSE: AXP) and Walmart Inc. (NYSE: WMT) bucked the trend of falling short interest. The financial services giant remains a Warren Buffett holding, and the retail leader extended store hours during the period.

Dow Stock	Short (millions)	Change	% Float
Pfizer	50.22	−6.11%	0.90%
Exxon	41.80	−13.90%	0.99%
Intel	41.77	−2.24%	0.98%
Verizon	30.33	−4.01%	0.73%
Cisco	29.82	−21.07%	0.71%
Microsoft	29.63	−18.75%	0.40%
Visa	26.25	−26.75%	1.56%
Disney	24.67	−7.14%	1.37%
Apple	23.66	−10.73%	0.55%
IBM	21.60	−4.46%	2.43%
Coca-Cola	21.57	−24.45%	0.51%
JPMorgan	20.30	−15.66%	0.67%
Walgreens	17.54	−7.28%	2.44%
Chevron	17.28	−3.21%	0.93%
Dow	15.80	−7.83%	2.13%
Walmart	14.23	12.89%	1.02%
Procter & Gamble	13.80	−9.01%	0.56%
Merck	11.80	−13.90%	0.47%
Raytheon Technologies	10.76	−7.08%	0.71%
Nike	10.13	−0.05%	1.05%
American Express	9.90	7.10%	1.23%
Johnson & Johnson	9.43	−23.88%	0.36%
Boeing	8.05	−18.53%	1.43%
3M	6.68	−0.02%	1.16%
Caterpillar	6.24	−5.88%	1.16%
Home Depot	6.16	−4.97%	0.57%
McDonald’s	6.06	0.39%	0.81%
UnitedHealth	5.47	−4.02%	0.58%
Travelers	4.61	−3.41%	1.83%
Goldman Sachs	3.92	1.18%	1.18%

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