Short sales volume up 3.8% on NYSE

The volume of shares sold short on the New York Stock Exchange rose 3.8% in the first two weeks of November, the exchange said Wednesday, suggesting an increase in bearish sentiment in the stock market.

As of Nov. 15, NYSE short interest rose to about 12.39 billion shares, up from 11.93 billion shares as of Oct. 31, marking the largest increase in short interest since mid-July.

Investors who sell securities “short” typically are betting that stocks will fall. A short-seller borrows shares and sells them, hoping to buy the stock back at a cheaper price later to repay the lent shares. If the bet is correct, the trader’s profit is the difference between the sale price and the lower repurchase price.

NYSE short interest has been inching back toward its July record of 12.95 billion shares as investors have grown more worried that financial services firms could suffer even more credit losses from the housing slump.