Why the short interest on Citi and Bank of America?

February 11, 2010 | By Jim Kim

Citigroup (C) and Bank of America (BAC) remain two heavily shorted stocks, according to TheStreet.com. Citigroup, the most heavily shorted stock on the Big Board, saw short interest rise to 439 million shares from 397 million in the first half of January. That built on increases in short interest over the last two months or so. Bank of America was not far behind Citigroup; short interest rose to 327 million shares up 251 million during the prior two-week period.

Wells Fargo (WFC) remains relatively lightly shorted. Short interest outstanding on JPMorgan Chase (JPM) dipped. So what's going on? One might argue that there has been a sense that the credit rating agencies might make a move; Standard & Poor's moved to negative on both Citi and Bank of America, but that may not explain everything.

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