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                 THE "SHORT" STORY

                                                   (taken from a Wall Street Journal article on Short Selling, August 12, 2009)

                                                               - an abbreviated summary with my comments following -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Back to Strategies

 

 

 

Some pundits think shorting is used as a "hedge," that is, a position to offset their long position in the same stock in case the market falls.  Unfortunately, that is a neutral growth strategy.  The total value of such an account will be "frozen" until one side or the other is closed out.  You'd be better off just buying a bank CD.

Shorting, like Buying, is a stand-alone strategy.  Ideally, you would buy what you think will go UP and short what you think will go DOWN.  Then you can win on both trades, but hedging  makes it impossible for you to win on either side!

Everyone of the TOP TEN above are priced below their 52-week high and are in a profitable position if they were shorted at the time of those highs.

Notice the HUGE amount of money that is devoted to profiting from the fall of those well-known stocks.  In a down market, shorting is the only winning decision.

 

As of the recent July 31 totals, the "Short Interest" (the number of shares currently shorted) stood at

14,032,249,608!

The Top Ten

(Based on the number of shares shorted)

                                                                 SHORT                    MARKET VALUE

1Citigroup, Inc. Common Stock C 343,281,000 3.691,266,706,890    
2Standard & Poor's Depositary R SPY 276,031,00099.7327,528,571,630    
3Pfizer, Inc. Common Stock PFE 267,789,00015.834,239,099,870    
4Merck & Company, Inc. Common S MRK 165,919,00030.335,032,323,270    
5iShares RUSSEL 2000l IWM 149,653,00056.278,420,974,310    
6General ElectricGE 143,482,00013.992,007,313,180    
7Nasdaq 100 PowerSharesQQQQ142,283,00039.265,586,030,580    
8E-TradeETFC136,250,0001.37186,662,500    
9Sirius Satelite SIRI134,423,0000.5067,211,500    
10IntelINTC 131,398,00018.642,449,258,720    

                                                                                                             Total Market Value:                 56,784,152,450

                           That's more than 56 Billion Dollars of stock that is in an open short position as of July 31, 2009.

 

 

 

 

 

Text Box: As of the recent July 31 totals, the "Short Interest" (the number of shares currently shorted) stood at 14,032,249,608! The Top Ten (Based on the number of shares shorted) SHORT MARKET VALUE 1 Citigroup, Inc. Common Stock C 343,281,000 3.69 1,266,706,890 2 Standard & Poor's Depositary R SPY 276,031,000 99.73 27,528,571,630 3 Pfizer, Inc. Common Stock PFE 267,789,000 15.83 4,239,099,870 4 Merck & Company, Inc. Common S MRK 165,919,000 30.33 5,032,323,270 5 iShares RUSSEL 2000l IWM 149,653,000 56.27 8,420,974,310 6 General Electric GE 143,482,000 13.99 2,007,313,180 7 Nasdaq 100 PowerShares QQQQ 142,283,000 39.26 5,586,030,580 8 E-Trade ETFC 136,250,000 1.37 186,662,500 9 Sirius Satelite SIRI 134,423,000 0.50 67,211,500 10 Intel INTC 131,398,000 18.64 2,449,258,720 Total Market Value: 56,784,152,450 That's more than 56 Billion Dollars of stock that is in an open short position as of July 31, 2009.