By Phil Wahba

NEW YORK (Reuters) - Short interest fell on the Nasdaq and on the New York Stock Exchange in mid-December, reflecting a decrease in bearish sentiment and a desire by short-sellers to lock in profits.

Short interest fell 3.1 percent on the New York Stock Exchange from late November to mid-December, while on the Nasdaq it fell 3.3 percent over the same period. In the previous two-week period, short interest rose on both exchanges.

"The shorts continue their buying spree this holiday season," said Dylan Wetherill, president and founder of short interest tracking website ShortSqueeze.com.

"The short sellers are showing confidence at these (price) levels and are stepping in to buy stocks at a very consistent pace as of late," he said, adding that short sellers are hunting for bargains in the stock market.

Investors who sell securities "short" profit from betting that stocks will fall. Short-sellers borrow shares and then sell them, waiting for the price to fall so they can buy them back for less, return them to the lender and pocket the difference.

On the NYSE as a whole, short interest fell to 13.71 billion shares as of December 15 from 14.142 billion shares as of November 28. During the same period at the Nasdaq, short interest fell to about 7.246 billion shares from 7.495 billion shares as of November 28.

The data on Wednesday showed the short ratio on the Nasdaq, or the average number of days it would take to cover outstanding short positions, rose to 3.43 days as of December 15 from 3.11 as of November 28.

At the NYSE, short interest was equal to 3.59 percent of the total shares outstanding.

(Reporting by Phil Wahba; Editing by Phil Berlowitz)

Publié le 24 Décembre 2008 Copyright © 2008 Reuters