Kedem Pharmaceuticals, Inc.(fka KDMP)

[jotuk6771]

STUDY$ :This FINRA Short Data List is a fashion on iHub and is as misinterpreted than used to manipulate the opinion on boards

Forget this short Data list because it doesn't mean nothing on a daily basis !

The short isn’t really a short it is the execution of a long sale by a market maker.

High short numbers might very well indicate a high number of legitimate retail sales.

So, this is why the short sale volume is high but also why the FTD’s and bi-Monthly short interest reports are not showing any indications of this volume






KoolAid: Daily FINRA Short Numbers

This is one of my favorites. How many times have you seen someone post the daily finra short numbers and make some claim about how the market makers are holding back a stock because the the short total is so high or some other unfounded claim. Let me state that those numbers mean almost nothing. Here’s why.

It is theoretically possible to have 100% legitimate retail sells show up as 100% shorts in the daily finra numbers...

Consider someone selling shares through their broker. There are two legs to the transaction, the MM selling the shares into the market and the MM taking ownership of the shares from the seller’s broker. There is also a possible third case in which the MM just buys the shares from the broker to complete the sale and holds them (as MM's can end up with both short or long positions in a stock in an effort to make a market). In this sell case, if the leg of the sell transaction from MM to the market is counted, the sell will (somewhat surprisingly) appear as a short in the numbers if the MM sells the shares to the market first before taking ownership of the shares from the broker (as the MM may sell short to the market first knowing that he’ll immediately get shares to cover from the seller’s broker). If the buy from the broker to MM leg (or the buy to “hold” by the MM) is counted, the sale will not appear as short. Only one leg of the transaction will appear in the daily numbers to not confuse the volume numbers.

Buy transactions are equally confusing as they also have two legs. The leg from the market to MM and the leg from MM to broker. If the leg from market to MM is counted, the buy not will show up as short (as the MM bought shares). If the leg from MM to broker is counted, it will show up as short (as the MM sold shares to the broker). There is also a third case in which the MM sells his own inventory to complete the buy (which will likely not show up as short) and a fourth case in which the MM sells shares it doesn't have (naked shorts) to complete the sale. This naked shorting is legally allowed so that the MM’s can make a market.

In general, the finra numbers are supposed to tally only the "consolidated tape" transactions, that is the transaction legs between the MM and the market (not the legs between MM and brokers--called media transactions). This has the effect of often having a large number of legit sells (possibly even all of them) show up as shorts in the counts.

If this was confusing, that’s the point. Exactly what a short in the daily count means depends on a variety of factors including exactly when and in what order a MM completes the two legs of a buy or sell transaction. High short numbers might very well indicate a high number of legitimate retail sales.


http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57118053


Another source :

Get Educated folks BEWARE of these numbers :

Short Sale Volume Reporting’s are deceiving. (From patchman)

I spoke to FINRA today and found out some very interesting things that until now I did not fully understand. I knew there was something wrong with this transparency of information but was not 100% sure what it was. I think I have my answer and it was enlightening.

I was first directed to the Notice to Members memo dated 9/29/2009

http://www.finra.org/Industry/Regulation/Notices/2009/P120045

The individual I spoke with wanted to make clear that to maintain proper trade volume reporting accuracy, a trade with multiple legs in the trade would only be reported once in the volume reports. The example given would be.

Investor A is long 100 shares and wants to sell. They enter the order through their broker that is routed to a market maker. That market maker will go out and sell the stock into the market before they have bought the stock from you/your broker to close out their account. They do not take possession first as there is no guarantee they can sell the order into the market. By this Notice, the actual sale INTO the market is a short sale because the market maker sold the stock into the market BEFORE they had purchased the stock from you. It is a technicality since they know there position will be closed out minutes later when they go in and buy your shares. To avoid doubling up on trade volume and distorting the picture, only the sale into the market (consolidated tape) is recorded and not the second leg which was the sale transaction between seller and market maker.

So, this is why the short sale volume is high but also why the FTD’s and bi-Monthly short interest reports are not showing any indications of this volume. The short isn’t really a short it is the execution of a long sale by a market maker. The key language in the FINRA notice is this:


Quote:
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The Daily Short Sale Volume File will provide daily access to the aggregate volume of short sales in NMS Stocks and OTC Equity Securities reported to a consolidated tape and traded over-the-counter during regular trading hours on each trading day.
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Consolidated tape is the open market where the transaction between seller and market maker is not done at the consolidated tape. That call this the media transaction.

Now for those wondering about Bona-Fide Market Making, I found out it can still be done but not electronically. The 15c-211 applies to electronic trade. Market Makers can continue to execute Bona-Fide Market making through phonic transactions but those sales made would be reported in the short interest reports bi-monthly and if not closed out will be reported as FTD’s in the system like any other trade failure.

Hope this helps at least clear up the high short interest volume reports seen. The reason the number is not 100% is because not all orders are routed thru independent market makers.