A possible different way to look at the (sigh) dai
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Posted On: 07/07/2017 6:22:35 PM
A possible different way to look at the (sigh) daily FINRA number:
what if some (and on some days, a lot or even most) of the sales marked as short sales are market manipulators selling short and then covering THE SAME DAY, Someone who doesn't have to pay commissions on each trade (hedge funds with contracts, and market makers) can do a bunch of trades like that for a few minutes, or a few hours, and then cover it the same day.
So we could have a day with 36% FINRA short number, but that doesn't mean that all those shares are short interest by the time the close rolls around. This seems to be one of the bones of contention. The question is, if there is that much shorting, why isn't there huge short interest? Well, my answer is -- because much of it is covered the same day.
Maybe the FINRA percentage indicates how active the market manipulators are on a given day. It doesn't mean that they are necessarily SUCCESSFUL moving the market they way they want, either.
It is often said that many of those short sales are very quick sales by a market maker, so that they can "make an efficient market" by filling orders. Well, for a small, relatively small volume OTC stock, I don't believe that. My own experience is that I've had to wait a VERY long time to get an order filled. On one memorable occasion I put an order in at the ASK and had to wait almost 20 minutes to get filled. Doesn't sound efficient to me.
I think there is a significant short position -- approximately 1.2 million reported -- given that the float is only 57 million shares. And I do think that there is some naked shorting -- my guess was about 900k-1million shares, which got covered because of the CUSIP change, and then around 800k shares re-shorted afterward. Having a significant short position is good for the stock because when there is news -- which could be very soon, or which could not come for a month or two -- all of those shorts will have to be covered, and it is going to fuel a shockingly fast move upward.
what if some (and on some days, a lot or even most) of the sales marked as short sales are market manipulators selling short and then covering THE SAME DAY, Someone who doesn't have to pay commissions on each trade (hedge funds with contracts, and market makers) can do a bunch of trades like that for a few minutes, or a few hours, and then cover it the same day.
So we could have a day with 36% FINRA short number, but that doesn't mean that all those shares are short interest by the time the close rolls around. This seems to be one of the bones of contention. The question is, if there is that much shorting, why isn't there huge short interest? Well, my answer is -- because much of it is covered the same day.
Maybe the FINRA percentage indicates how active the market manipulators are on a given day. It doesn't mean that they are necessarily SUCCESSFUL moving the market they way they want, either.
It is often said that many of those short sales are very quick sales by a market maker, so that they can "make an efficient market" by filling orders. Well, for a small, relatively small volume OTC stock, I don't believe that. My own experience is that I've had to wait a VERY long time to get an order filled. On one memorable occasion I put an order in at the ASK and had to wait almost 20 minutes to get filled. Doesn't sound efficient to me.
I think there is a significant short position -- approximately 1.2 million reported -- given that the float is only 57 million shares. And I do think that there is some naked shorting -- my guess was about 900k-1million shares, which got covered because of the CUSIP change, and then around 800k shares re-shorted afterward. Having a significant short position is good for the stock because when there is news -- which could be very soon, or which could not come for a month or two -- all of those shorts will have to be covered, and it is going to fuel a shockingly fast move upward.
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