Health Sciences Group Inc (HESG)

[BigBake1]

Once again Short Volume is meaningless it isnt a "short position" nor an open position. I will remind of Rule 200 as to what the markings mean exactly:

Rule 200 – Definitions and Marking Requirements. Rule 200 incorporates and amends Rules 3b-3, 10a-1(d) and 10a-1(e)(13). It defines ownership for short sale purposes, and clarifies the requirement to determine a short seller’s net aggregate position. It also incorporates requirements to mark sales in all equity securities “long,” “short,” or “short exempt.”

Rule 200(g) of Regulation SHO requires a broker-dealer to mark sell orders in any equity security as "long" or "short." Rule 200(a) defines a short sale as "any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller." Rule 200(g)(1) provides that "[a]n order to sell shall be marked "long" only if the seller is deemed to own the security being sold pursuant to paragraphs (a) through (f) of this section and either: (i) The security to be delivered is in the physical possession or control of the broker or dealer; or (ii) It is reasonably expected that the security will be in the physical possession or control of the broker or dealer no later than the settlement of the transaction." Rule 200(c) of Regulation SHO provides that a person shall be deemed to own securities only to the extent that he has a net long position in such securities. In addition, to determine its own net position, Rule 200(f) requires a broker-dealer to aggregate all of its positions in a security unless it qualifies for independent trading unit aggregation.

pretty clear if any party that is part of the transaction that doesnt own or have physical custody of the security it will be marked short despite being long.

Now as to HESG data, you can clearly see it ran the same issue for 2 years straight, for 2011-2012:



This is caused by being illiquid and at .0001 for a long periof of time, these type of tickers do not RS and continue to dump shares into the market no matter how much volume is present. Thus creating high short volume numbers.

In comparison, we can see yet another .0001 security with a 75 billion OS during periods of illiquid trading.



Actually this has less than HESG as it is for a smaller period of time in comparison. But you can certainly see when there is liquidity present the short volume numbers drop and when there isnt any liquidity the short volume increases. There many more like these and they all share the same common factors, low liquidity, .0001 price and continuous dilution no matter what volume is present.