UPDATE 1-Short bets in US stocks rise in late March

(Adds details, recasts)

NEW YORK, April 11 (Reuters) – Short interest on both the
New York Stock Exchange and Nasdaq rose through the second half
of March, the exchanges said on Monday, suggesting investors
added to their short positions on expectations of further
losses as the market slid.

The Standard & Poor’s 500 index (.SPX: Quote, Profile, Research) hit its 2011 low on
March 16 as Japan’s natural and nuclear crisis, as well as
unrest in Libya and the Middle East, hurt investor sentiment.

Short interest on the NYSE rose 0.85 percent to 12.64
billion shares through March 31, from 12.54 billion shares as
of March 15.

Short interest on the Nasdaq rose 1.6 percent in the second
half of March to 6.67 billion shares, from 6.56 billion shares
as of March 15.

Investors who sell short seek to profit from falling stock
prices by borrowing shares and then selling them in the hope of
buying them back at a cheaper price while pocketing the

Shorts, however, can be squeezed out if prices rise
instead, which can exacerbate gains as investors are forced to
buy to unwind their bets.

UPDATE 1-Short bets in US stocks rise in late March