stocks witnessed a build of fresh short positions. Lets first understand how this conclusion is reached that whether the stock has seen a buildup of fresh short position or not.
To understand it we have to look at what “ short selling” means. When a trader is expecting the stock prices to fall, he may sell the stock without owning that and buy at a lower price, for example, stock XYZ is trading at 100, a trader sells the stocks at Rs 100 and buys it back at Rs 90.
He made a profit of Rs 10. Selling the stocks without owing the underlying stock is called short selling.
Coming to the buildup of fresh short positions, When the stock prices move downward and open interest on the counter increases, it is taken as a sign of a short build-up.