Shorts in Freddie Spike

Stock speculators increased their bets against Fannie Mae and Freddie Mac in July, according to new short position figures compiled by Dow Jones & Co.Short positions in Freddie Mac increased sequentially (from June to July) by 64.5% to 8,232,315 shares. Shorts in Fannie increased by 12.6% to 16,697,993. Short-sellers borrow stock at what they view as an inflated price, selling those shares into the open market. Then, later on, they replace the borrowed shares by repurchasing the stock. If the repurchase price is lower than what they borrowed the stock for in the first place, the short-seller profits. Speculators have been increasing their bets against the two congressionally chartered companies in the wake of a reaudit scandal at Freddie Mac.