This thesis aims to examine whether it is possible to forecast which firmswill be shorted. To do this a regression was constructed using a sample of thecompanies currently included in S&P 500. Short interest as percentage offloat was set as the dependent variable with volatility, institutionalownership, past stock returns, growth in net sales and price-to-earnings ratio(P/E) as the independent variables. Our results concluded that all variablesexcept institutional ownership were statistically significant at a 5% level withthree of these being significant even at a 1% level. Based on these results, webelieve that it to a certain degree is possible to forecast which firms will beshorted.