Reuters.com reports short selling of financial and automaker stocks has fallen sharply since July, as traders balk at the dimming prospects to profit from these battered shares and the U.S. government increases control over the economy. Traders and experts expect the trend to continue, and caution that it could exacerbate volatility and weaken a key safeguard against stocks becoming overvalued... Since July 10, short interest on financial companies has fallen nearly 40% to an average of 3.68% on November 14, according to Short Alert Research data released this week. Among brokerages, the decline in short interest - the ratio of stocks sold short to overall shares - was an even greater 43.5%. Short interest in automakers has declined 32% in the past five months to roughly 11.5%, with short calls on General Motors (GM) halving since August.
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