Despite the gradual improvement in the economy and generally upbeat equity sentiment, there's no shortage of bearish wagers out there.

Folks are still betting against the bulls by taking short positions -- which essentially means selling shares you don't own and buying them back later to zero out your account.

In order to dig a little deeper into the bearish mindset, I figured that I would take a closer look at the five Nasdaq stocks with the largest short positions when the month began.

Company

Nov. 30

Nov. 15

Sirius XM Radio (Nasdaq: SIRI)

224.3 million

212.5 million

Level 3 Communications (Nasdaq: LVLT)

163.7 million

139.4 million

Intel (Nasdaq: INTC)

90.1 million

49.8 million

PowerShares QQQ (Nasdaq: QQQQ)

76.9 million

82.7 million

Microsoft (Nasdaq: MSFT)

75.7 million

71.5 million

Source: Barron's.

Before breaking into an interesting trend, let's go over what each of these five investments covers.

  • Sirius XM is the satellite radio monopoly with 20 million subscribers.
  • Level 3 provides Internet and network services.
  • Intel is the leading maker of microprocessors.
  • QQQ is an ETF that tracks the Nasdaq 100 Composite.
  • Microsoft is the world's largest software company.

The first thing you may notice is that all four of the actual stocks had an increase in shorting during the latter half of last month -- and dramatically so in Intel's case. If QQQ tracks the performance of the 100 largest Nasdaq stocks, shouldn't it also be seeing an uptick in bearish sentiment?

The second thing you may notice is that the four stocks each have more than a billion shares outstanding. Yes, even Level 3 has 1.7 billion shares outstanding. The gargantuan sums make it logical to expect heavy short positions. By the same token, a cynic can argue that these companies also have some of the largest long positions among Nasdaq stocks, too.

The third and final thing that bears point out is that Sirius and Level 3 command low share prices. This is magnetic to speculators on both the long and short side, but it also means that share volume alone isn't a fair indicator. Cisco Systems (Nasdaq: CSCO) had 40.4 million shares sold short at the end of November. That's not enough to crack even the Top 10 list among short positions, but at current prices, it represents $787 million in bets against the company. Sirius XM and Level 3, on the other hand, have $312 million and $154 million -- respectively -- in short positions.

Investors should still continue to monitor the shorting data, which comes out semi-monthly. Spot the trends. Gauge sentiment. One should also realize that a large short position isn't necessarily a bad thing. If a positive catalyst alters the investing landscape, shorts scrambling to cover their positions can create a dramatic bullish rally called a short squeeze.

Shorts can move the market, and not always in the direction they would like.

What stocks are you shorting these days? Share your thoughts in the comment box below.

Intel and Microsoft are Motley Fool Inside Value recommendations. The Fool has a bull call spread position on Cisco Systems. Motley Fool Options has recommended buying calls on Intel and a diagonal call position on Microsoft. The Fool owns shares of and has bought calls on Intel and owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz doesn't mind sifting through the unloved for a good buying opportunity. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.