Short interest in stocks listed on the New York Stock Exchange (NYSE) reached a record high in late September, exceeding 21 billion shares for the first time, according to data from EPFR’s global market intelligence team.
The firm’s semi-monthly figures showed that the number of shares held in short positions increased by 2.7% during the reporting period, continuing a longer-term upward trend in short interest.
EPFR interpreted the increase as a potentially favourable indicator from a contrarian investment perspective, although the figures also reflect the growing volume of positions established in anticipation of share-price declines.
Short Positions Increase 2.7% in Latest Reporting Period
According to EPFR, aggregate short interest across NYSE-listed securities surpassed the 21 billion-share threshold for the first time on record.
The 2.7% increase recorded in the latest semi-monthly reporting period extended a broader trend of rising short interest.
Short selling involves borrowing and selling shares with the intention of repurchasing them later, typically at a lower price. The number of shares held short is commonly monitored as an indicator of market positioning.
EPFR’s global market intelligence team described the increase in short interest as a constructive development from a contrarian standpoint.
Under this interpretation, elevated short positioning can be viewed as a potential source of future buying activity if investors close their short positions.
However, the data do not establish whether or when such buying activity might occur.
Technology Shares Decline Amid AI Demand Questions
The short-interest figures were reported during a period of declining US technology shares and renewed questions about the sustainability of demand for artificial intelligence-related products and services.
The Nasdaq 100 index, which includes major technology companies, fell 2% on Wednesday.
Futures linked to the index declined by more than 1% in early Thursday trading, extending the recent retreat in technology-related equities.
The movements followed gains earlier in the year associated with investor interest in artificial intelligence.
The source data do not establish a direct relationship between the increase in NYSE short interest and the subsequent declines in technology shares.
EPFR Maintains Contrarian Interpretation of Positioning Data
EPFR noted that the longer-term trend in short interest remains upward and maintained its interpretation of the figures as a potentially positive market signal.
From a contrarian perspective, an increase in bearish positioning may indicate that a larger proportion of investors has already established positions against the market.
Nevertheless, the record level of short interest represents an observed measure of market positioning rather than a forecast of future equity performance.
The latest figures highlight the increase in short positions across NYSE-listed stocks as US equity markets experience renewed volatility, particularly among companies exposed to artificial intelligence investment.