Apr 6, 2016

Posted by in Stock Market News | 0 Comments

Short Interest In Three Large-Cap Stocks: Morgan Stanley (MS), Regions Financial Corporation (RF), Devon Energy Corporation (DVN)

Short Interest In Three Large-Cap Stocks: Morgan Stanley (MS), Regions Financial Corporation (RF), Devon Energy Corporation (DVN)

Shorting stocks is always risky for investors. But it can be a sure way to avoid burning cash when a company’s shares crash, making it worth the bet. Short interest is the total number of shares of a particular stock that have been sold short by investors but have not yet been covered or closed out. This can be expressed as a number or as a percentage.

Most stock exchanges track the short interest in each stock and issue reports. These reports are great for traders because by showing what short sellers are doing, they allow investors to gauge overall market sentiment surrounding a particular stock. A high short-interest stock should be approached with extreme caution but not necessarily avoided at all cost.

Some bullish investors see high short interest as an opportunity. This outlook is based on the short interest theory. The rationale is, if you are short selling a stock and the stock keeps rising rather than falling, you’ll most likely want to get out before you lose your shirt. A short squeeze occurs when short sellers are scrambling to replace their borrowed stock, thereby increasing demand and decreasing supply, forcing prices up. Short squeezes tend to occur more often in smaller cap stocks, which have a very small float (supply), but large caps are certainly not immune to this situation.

As of 15/03/2016 short interest for Morgan Stanley (MS) stood at 22132872 shares, an increase of 443518 shares or 2 percent compared to 21689354 shares on 01/03/2016. This short interest comprises 1 percent of the entire float. Short interest ratio now stands at 1.27 at the average volume of 17421107 shares.

According to the latest short-interest data for the two-week period ended 15/03/2016 short interest for the stock of Regions Financial Corporation (RF) increased from 27599344 shares at the end of the settlement date of 01/03/2016 to 29479762 shares, marking a growth of 1880418 shares or 6.38 percent. The current short interest accounts for 2.32 percent of the company’s total outstanding common shares and the days-to-cover short interest ratio, on the other hand, is 1.504759 as of 15/03/2016 assuming average daily trading volume of 19591014 shares.

Short interest for the shares of Devon Energy Corporation (DVN) rose 16.34 percent from 13413260 shares on 01/03/2016 to 16032528 shares on 15/03/2016. Investors have taken short positions on 3 percent of the total common shares of the stock that are floating on the exchange. The days-to-cover short interest ratio is now at 1 day. It is based on average daily trading volume of 17872557 shares.

 

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