Short Interest

Tyler Durden's picture

NYSE Short Interest Surges To Second Highest In A Year In Advance Of September Short-Covering Rally





Still wondering what caused the nearly 10% spike in the market? It sure as hell wasn't flows into funds and/or ETFs: both were negative for August, and we know that at least mutual funds have seen outflows for all of September. The reason is far simpler and it is no different from what caused the blind rally back in March 2009 when State Street commenced forced stock buy-ins after it gave an order to repo desks to recall all financial shorts: the NYSE short interest as of August 31 was 14.4 billion shares. This was the second highest gross short interest on the NYSE in over a year, and the highest since mid-June, when the market dropped from over 1,100 to the year lows just over 1,000. This time however, shorts were caught flat footed, as the spike in shorts by over 600 million NYSE shares, has seen a straight line market ramp beginning on August 31, and forcing blind covering without regard for what offers are lifted: a perfect environment for those who wish to set price on the offer side to execute their plan. At this point the short covering rally appears to have fizzled - we will update you on the mid-September SI data when it is released in a few days time.

 
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NYSE Short Interest Lowest Since January As Selloff Buffer Disappears





Here is another reason why the market may soon undergo Flash Crash 2.0 on purely structural reasons that have nothing to do with the deranged computerization of capital markets - the one natural decelerator to any market collapse, short interest, was just reported by the NYSE to have hit a 7 month low, at 13.7 billion shares. This metric hit a 2010 high of 14.5 billion in the days following the flash crash, when the natural response by investors was to follow through on waht was expected to be a major market swoon. Yet the odd July move higher on no volume which was a direct replica of last year's action cut off this move into shorts early on, and the result now is that the short interest buffer is now gone. Absent the mystery bidder appearing, there will be few "profitable" buyers remaining to prop the imminent market crash.

 
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NYSE Short Interest Drops By 200 Million Shares, Still Near 2010 Highs





Looking at the short interest in the NYSE one would think that the market is a mirror image of where it has been. Interestingly, even though for the week ended March 31, the NYSE recorded a drop in short interest by 224 million shares, the total number of 13.9 billion shares short is near 2010 highs. Beginning at a low of 13 billion shares on January 1, short interest has risen steadily hitting the YTD high of 14.1 billion on March 15. It appears that the shorters, at least as indicated by this data series still continue to disbelieve the no volume melt up. We will observe the next update in two weeks to see if the April 15th data point indicates capitulation by the shorts, or if shorts have layered into bearish bets. To be sure, compared to prior year short positions, which hit a high of 15.6 billion just before the second half 2009 rally began, we are at materially lower short levels.

 
Tyler Durden's picture

NYSE Short Interest Stays Flat At 13.2 Billion Shares, Down 12% Over Prior Year





The most recent short interest report from the NYSE indicated that bearish bets in the form of short exposure is near 2009 lows. The number of shares shorted on November 30, 2009 was 13.2 billion, a 0.2% increase from two weeks prior and a 12% decline from the prior year's 14.8 billion. Of the 4,124 stocks available for trading, 3,431 had short positions of at least 5,000. The most recent short interest came out at 3.45% of total shares outstanding, also flat from the prior two weeks.

 
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NYSE Short Interest Rises 2.8% In First Half Of October





In the first half of October, NYSE short interest as reported staged a moderate comeback, rising by 2.8% sequentially to 13.4 billion shares on October 15th, from 13.1 billion at the end of August, and a 1.1% decline from the 13.6 billion shares short on October 15, 2008. The short interest represented 3.51% of total shares outstanding.

 
Tyler Durden's picture

NYSE Short Interest Drops 3.5%, 42.5% Below Peak





On October 9, the NYSE provided its latest Short Interest update. The total number of shorted shares on the New York Stock Exchange at September 30 was 13.06 billion, a 3.5% decline from the 13.52 billion on September 15, a 42.5% decline from the all time high short position of 18.61 billion on July 15, 2008, and a 23.8% decline from the 2009 high of 16.17 billion in mid-March. The latest short interest represented a mere 3.42% of the total share outstanding as more and more bearish bets are closed, either voluntarily or forecefully. The current SI is equal to the short interest at the end of 2007.

 
Tyler Durden's picture

Pick Up In SPY Short Interest





Data Explorers, via Alphaville, is demonstrating a rapid pick up in SPY shares on loan, a proxy for Short Interest. Of course, with periodic short recalls such as the one in IYR by UBS, it is only a matter of time before the banks create an artificial end to any such comparable bearish momentum trend in any of the highly trafficked ETFs. Stay tuned as we find out where the first SPY recall of the day will occur.

 
Tyler Durden's picture

Market Rips, Short Interest Plunges





This is so much more than just a short covering rally. Oh wait, it's not.

 
Tyler Durden's picture

Early March Saw Largest Increase In Short Interest In 9 Months





According to data from TrimTabs, the first half of March (March 2- March 13) saw $15.78 billion in new short positions opened in the Russell 3000, resulting in aggregate short interest of 14.28 billion shares or a total of $227 billion in short positions (2.92% of Russell 3000 market cap) at March 13, from 12.84 billion shares or $203 billion on February 27. This has been the largest increase in short interest since June 2008.

 
Tyler Durden's picture

Early March Saw Largest Increase In Short Interest In 9 Months





According to data from TrimTabs, the first half of March (March 2- March 13) saw $15.78 billion in new short positions opened in the Russell 3000, resulting in aggregate short interest of 14.28 billion shares or a total of $227 billion in short positions (2.92% of Russell 3000 market cap) at March 13, from 12.84 billion shares or $203 billion on February 27. This has been the largest increase in short interest since June 2008.

 
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