NYSE Short Interest Posts Another Record High

Activity by bearish investors expecting a further drop in stock prices rose to another record high in the last month, according to data released Wednesday by the New York Stock Exchange.

So-called short interest increased to 6.27 billion shares Nov. 15 from 6.08 billion on Oct. 15.

Stocks with high-profile problems, such as airlines and beleaguered Enron Corp. (ticker symbol: ENE), were among the stocks that were targeted by short sellers.

Short interest measures the number of shares that have been sold short by bearish investors.

In a short sale, an investor borrows shares of a company from a brokerage and sells them in the open market.

If the shares fall in value, as the investor hopes, he or she can purchase replacement shares to return to the brokerage at a cheaper price, thus pocketing the difference between the two prices.

Short interest on the NYSE has been rising steadily from around 4 billion shares since the stock market peaked in early 2000.

Short interest in UAL Corp. (UAL), parent of United Airlines, surged 45.5% to 9.96 million shares. Short interest in U.S. Airways Group (U) jumped 11.6% to 9.75 million shares. And shorting rose 5.8% to 2.53 million shares in AMR Corp. (AMR), parent of American Airlines. Shorting of Continental Airlines shares (CAL), which had leapt more than threefold from September to October, fell 46.6% to 6.36 million shares.

Short sales of energy company Enron surged 76.2% to more than 31 million shares. Shorting of Dynegy Inc. (DYN), which has proposed buying Enron, more than doubled, climbing 106% to more than 12 million shares.