Short-sellers have been swarming over Olympic Financial Ltd. since the auto finance company's shares peaked at $30.62 in October.

Despite a 9.4% decline in a month, the short position of nearly five million shares was the largest among finance-related issues traded on the Nasdaq for the month ended Feb. 15.

Overall, short interest in these stocks rose 0.7%, to nearly 47.8 million shares, while short interest for the entire Nasdaq market rose 6.5% during the month, to more than 955 million shares. (See table on page 18.)

Short interest is the outstanding volume of shares sold short - that is, borrowed and promptly sold. Short-sellers are betting that the stock price will fall, so their short positions can be covered profitably with cheaper shares.

The professional pessimists, who believe Olympic will suffer from asset- qualilty problems, have been rewarded by a nearly 50% decline in the Minneapolis firm's share price - to $15.TK at the close of trading on Wednesday.

Many apparently used the opportunity over the past month to cover their positions. Short interest in Olympic fell by 518,620 shares, or 9.4%, the second-largest decline among finance-related stocks.

"If you've been short Olympic stock, you've been right," said John Heffern, a specialty finance company analyst at Natwest Securities.

"Continuing confusion about asset quality," specifically about an increase in repossessions reported by the company in the fourth quarter, has kept short interest in Olympic high, said Mr. Heffern.

Similar concerns over consumer credit quality led to increases in short interest at two other specialty lenders during the month.

Credit Acceptance Corp., a Southfield, Mich.-based auto finance company, had a 743,341 increase - to nearly 1.5 million shares - in short interest in the month, the largest of any financial services company traded on Nasdaq. And short interest in Union, N.J.-based Money Store Inc. rose 370,032 during the month, to nearly 2.4 million shares.

Short-selling is frequently used to lock in profits on mergers. That strategy contributed to a 588,854-share decline in the short position on U.S. Bancorp, which had completed its merger with West One Bancorp at the beginning of the year.

The number of U.S. Bancorp shares sold short remains high, a factor analyst Carole Berger of Salomon Brothers attributed to the bank's recently announced acquisition agreement with California Bancshares.

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