1
 Short interest in Nasdaq over-the-counter stocks rose 6% as of mid-October, its biggest jump since 6.3% last April.
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2
 The most recent OTC short interest statistics were compiled Oct. 13, the day 
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the Nasdaq composite index slid 3% 
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and the New York Stock Exchange tumbled 7%.
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5
 The coincidence might lead to the conclusion
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6
 that short-sellers bet heavily on that day 
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that OTC stocks would decline further.
6
attribution

8
 As it happens,
9
circumstance

9
 the Nasdaq composite did continue to fall for two days after the initial plunge.
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10
 However, the short interest figures 
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reported by brokerage and securities clearing firms to the National Association of Securities Dealers
10
elaboration-object-attribute-e

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 include only those trades 
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completed, or settled, by Oct. 13, rather than trades 
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that occurred on that day,
13
elaboration-object-attribute-e

15
 according to Gene Finn, chief economist for the NASD.
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attribution

16
 Generally, it takes five business days to transfer stock and to take the other steps
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 necessary to settle a trade.
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elaboration-object-attribute-e

18
 The total short interest in Nasdaq stocks as of mid-October was 237.1 million shares, up from 223.7 million in September but well below the record level of 279 million shares 
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established in July 1987.
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elaboration-object-attribute-e

20
 The sharp rise in OTC short interest compares with the 4.2% decline in short interest on the New York Stock Exchange and the 3% rise on the American Stock Exchange during the September-October period.
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elaboration-additional

21
 Generally, a short seller expects a fall in a stock's price 
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and aims to profit
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 by selling borrowed shares
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 that are to be replaced later;
23
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 the short seller hopes 
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the replacement shares
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 bought later
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 will cost less than those
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 that were sold.
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30
 Short interest,
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 which represents the number of shares
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 borrowed and sold,
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33
 but not yet replaced,
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34
 can be a bad-expectations barometer for many stocks.
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Same-Unit

35
 Among 2,412 of the largest OTC issues, short interest rose to 196.8 million shares, from 185.7 million in 2,379 stocks in September.
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36
 Big stocks with large short interest gains as of Oct. 13 included First Executive, Intel, Campeau and LIN Broadcasting.
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37
 Short interest in First Executive, an insurance issue, rose 55% to 3.8 million.
5038
Comparison

38
 Intel's short interest jumped 42%,
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Comparison

39
 while Campeau's increased 62%.
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Comparison

40
 Intel makes semiconductors
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List

41
 and Campeau operates department-store chains 
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42
and is strained for cash.
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List

43
 Meritor Savings again had the dubious honor 
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of being the OTC stock with the biggest short interest position on Nasdaq.
43
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45
 Meritor has headed the list since May.
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elaboration-additional

46
 First Executive and troubled Valley National Corp. of Arizona were next in line.
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comparison

47
 Short selling isn't necessarily bad for the overall market.
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48
 Shorted shares must eventually be replaced 
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49
through buying.
48
means

50
 In addition, changes in short interest in some stocks may be caused by arbitrage.
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List

51
 For example, an investor may seek to profit during some takeover situations 
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52
by buying stock in one company involved 
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53
and shorting the stock of the other.
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54
 Two big stocks 
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involved in takeover activity 
54
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56
saw their short interest surge.
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Same-Unit

57
 Short interest in the American depositary receipts of Jaguar, the target of both Ford Motor and General Motors, more than doubled.
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elaboration-general-specific

58
 Nasdaq stocks
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 that showed a drop in short interest
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 included Adobe Systems, Class A shares of Tele-Communications and takeover targets Lyphomed and Jerrico.
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Same-Unit

61
 The NASD,
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 which operates the Nasdaq computer system 
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on which 5,200 OTC issues trade,
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 compiles short interest data in two categories:
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Same-Unit

65
 the approximately two-thirds, and generally biggest, Nasdaq stocks
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 that trade on the National Market System;
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67
 and the one-third, and generally smaller, Nasdaq stocks
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 that aren't a part of the system.
67
elaboration-object-attribute-e

69
 Short interest in 1,327 non-NMS securities totaled 40.3 million shares,
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70
 compared with almost 38 million shares in 1,310 issues in September.
69
comparison

71
 The October short interest represents 1.04 days of average daily trading volume in the smaller stocks in the system for the reporting period,
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72
 compared with 0.94 day a month ago.
71
comparison

73
 Among bigger OTC stocks, the figures represent 2.05 days of average daily volume,
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74
 compared with 2.14 days in September.
73
comparison

75
 The adjacent tables show the issues
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76
 in which a short interest position of at least 50,000 shares existed as of Oct. 13
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Disjunction

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 or in which there was a short position change of at least 25,000 shares since Sept. 15 
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Disjunction

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(see accompanying tables 
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-- WSJ Oct. 25, 1989).
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