Filed under: Short stories, Countrywide Financial (CFC), Wachovia Corp (WB), Washington Mutual (WM), Wells Fargo (WFC)
A review of the short interest in stocks traded on the New York Stock Exchange shows that some investors are willing to bet that shares in big financial institutions may go ever lower.
The figures from the exchange take the short interest in companies on November 15 and compare it to the numbers from October 31.
The short interest in Countrywide Financial (NYSE: CFC) moved up 5.5 million shares to 112.5 million. It was the second most-shorted stock listed on the NYSE. In the last five trading days, the stock has moved from above $12 to below $9, so traders may have already made some money. Washington Mutual (NYSE: WM) saw a sharp increase in shares sold short, up 12.3 million to 74.6 million. Trading in the stock over the last five days has made that bet look good. And, short sellers may hold their positions for a while longer, hoping for more bad news from the sector.
Wall Street’s shorts also moved into positions that assume shares in commercial banks could sell off more. Shares sold short in Wachovia (NYSE: WB) spiked almost 7 million to 37 million, and the short interest in Wells Fargo (NYSE: WFC) moved up almost 6 million to 53.7 million.
If more mortgage-related write-offs come out of the financial services industry, the gambles against stocks in the sector will pay off handsomely.
Douglas A. McIntyre is an editor at 247wallst.com.
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