Last Friday, short interest figures for the end of September were released, and once again they showed declines. The average short interest as a percentage of float for companies in the S&P 1500 was 6.4%. This is now lower than any other point since at least the start of 2007. As shown in the chart, bets against the market have declined considerably since their peaks in 2008.
As if shorting into one of the strongest rallies ever hasn't been hard enough, now traders on the short side have to deal with 'merger Mondays'. A case in point recently was Affiliated Computer Services (ACS). During the second half of September, ACS saw a larger increase in short interest than any other stock in the S&P 500 relative to its range of the last year. In absolute terms, its short interest increased by over 200% from 1.3 mln to 4.2 mln shares. Since short interest figures are calculated using settled trades, and settlement for equities is three trading days, under normal circumstances the last day to trade ACS in order to be included in the September figures would have been on Friday September 25th.
So what happened the next day? Before the opening on 9/28, Xerox (XRX) announced that it was buying ACS for $63 in cash and stock. After closing the prior Friday at $47.25, ACS traded 14% higher on Monday. Just as 2008 was probably the golden age of shorting, the last two quarters have been the dark ages.
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Where can I get above chart? Is it also available for DJIA? Thanks.
Posted by: Martel Marko | October 14, 2009 at 05:53 PM