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Nasdaq short interest falls in November

Fri Nov 25, 2005 2:37 PM ET
By Jennifer Coogan

NEW YORK, Nov 25 (Reuters) - Short interest fell on the Nasdaq in November, according to information released by Nasdaq on Friday.


As of Nov. 15, the number of short-selling positions not yet closed out fell to 5.91 billion shares from 5.94 billion shares in the previous month.

Over the month ended Nov. 15, the tech-heavy Nasdaq Composite Index gained 5.6 percent

Investors who sell securities "short" profit from betting stocks will fall. Short-sellers sell borrowed shares, hoping the stock price will fall so they can buy at the lower price, return the borrowed shares and pocket the difference.

Short interest in the stock market is often a gauge for the level of skepticism among investors. A rise in short interest signals more skeptics, and vice versa.

The short-interest ratio can act as a similar signal, where a high ratio is considered a bullish indicator by some investors and a low ratio bearish.

The Nasdaq's short ratio, or the average number of days it would take to cover the outstanding short positions, fell to 3.23 days from 3.31 days in October.

Nasdaq-listed companies with the largest increase in short interest in November included Microsoft Corp. (MSFT.O: Quote, Profile, Research), Cadence Design Systems Inc. (CDN.N: Quote, Profile, Research), Yahoo Inc. <YHOO.O, eBay Inc. (EBAY.O: Quote, Profile, Research) and Abgenix Inc. (ABGX.O: Quote, Profile, Research).

The five companies with the biggest decrease in short interest included Applied Materials Inc. (AMAT.O: Quote, Profile, Research), Eyetech Pharmaceuticals Inc. (EYET.O: Quote, Profile, Research), Qualcomm Inc. (QCOM.O: Quote, Profile, Research), Sun Microsystems Inc. (SUNW.O: Quote, Profile, Research) and Charter Communications Inc (CHTR.O: Quote, Profile, Research).