NEW YORK, Jan 12 - Short interest on the Nasdaq fell 0.84 percent in the second half of December, the exchange said on Tuesday, suggesting a decrease in bearish sentiment in the stock market.
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As of Dec. 31, short interest fell to about 6.40 billion shares from 6.46 billion shares as of Dec. 15.
The Nasdaq's short ratio, or the average number of days it would take to cover outstanding short positions, decreased to 3.20 days from 3.42 days.
Investors who sell securities "short" borrow shares and then sell them, waiting for the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference.
(Reporting by Rodrigo Campos, Editing by Chizu Nomiyama)