I used to think the FINRA short sale data was usel
Post# of 72447
Posted On: 09/11/2015 10:05:30 AM
I used to think the FINRA short sale data was useless too. Then I started reading the daily percentages, and noticed that they seemed to vary between about 26% and as high as 50%.
So I wondered. If, as they say, that short sale data includes temporary short sales by a market maker, which are quickly covered -- then why is it that if some market maker is being so pro-active about filling trades, that I can sit there on the ASK for 5 minutes and not get filled -- wouldn't I get filled right away, as the market maker shorted stock? Why would the percentage vary so widely from day to day? Is it related to the volume? If that's the case, then why is it that days with similar volume can vary from 28% to over 40% short sales (as we saw recently)?
Has anybody seen any evidence that some market maker is trying to give people fast fills? If so, why did we have weeks or months when some of us reported buying a thousand or more shares at a time, and getting filled in multiple 100 share lots? Would a market maker short 100 shares at a time, over 15 or more seconds, to fill an order?
My answer is: there does not seem to be some selfless market maker who is stepping in to make orders fill smoothly. Those crazy 100 share fills wouldn't be happening if there were. Those instances of sitting on the ASK and still not getting filled wouldn't be happening.
I think that the market makers genuinely DO account for a large percentage of that number, on big-cap stocks where they are actually making a market. I think that a small, heavily manipulated stock under attack by a cabal of short sellers does NOT have a market maker who is making sure there are fast, orderly fills, and it's a different situation than a large-cap stock, or even a small stock that isn't under attack as we are.
So, I think there IS something to that short sale data, but I think we don't know how to interpret it yet.
What I say is, it hurts no one, and those who want to can read it and perhaps someday figure out what it means. Those who don't want to read it can skip the post or put AlanC on ignore.
For myself, I'm continuing to try to get a feel for that percentage after I see how the stock traded, and it saves me the trouble of remembering to go check it myself.
So I wondered. If, as they say, that short sale data includes temporary short sales by a market maker, which are quickly covered -- then why is it that if some market maker is being so pro-active about filling trades, that I can sit there on the ASK for 5 minutes and not get filled -- wouldn't I get filled right away, as the market maker shorted stock? Why would the percentage vary so widely from day to day? Is it related to the volume? If that's the case, then why is it that days with similar volume can vary from 28% to over 40% short sales (as we saw recently)?
Has anybody seen any evidence that some market maker is trying to give people fast fills? If so, why did we have weeks or months when some of us reported buying a thousand or more shares at a time, and getting filled in multiple 100 share lots? Would a market maker short 100 shares at a time, over 15 or more seconds, to fill an order?
My answer is: there does not seem to be some selfless market maker who is stepping in to make orders fill smoothly. Those crazy 100 share fills wouldn't be happening if there were. Those instances of sitting on the ASK and still not getting filled wouldn't be happening.
I think that the market makers genuinely DO account for a large percentage of that number, on big-cap stocks where they are actually making a market. I think that a small, heavily manipulated stock under attack by a cabal of short sellers does NOT have a market maker who is making sure there are fast, orderly fills, and it's a different situation than a large-cap stock, or even a small stock that isn't under attack as we are.
So, I think there IS something to that short sale data, but I think we don't know how to interpret it yet.
What I say is, it hurts no one, and those who want to can read it and perhaps someday figure out what it means. Those who don't want to read it can skip the post or put AlanC on ignore.
For myself, I'm continuing to try to get a feel for that percentage after I see how the stock traded, and it saves me the trouble of remembering to go check it myself.
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