NewStream Energy Technologies Group Inc (NSGP)

[BigBake1]

No need to, FINRA makes it clear as to the fact the data has no value and cannot be used to draw a conclusion as to what is short and what is long position trades. None of those are actual short positions and most if not all were reconciled within seconds if not minutes after recording only the initial leg of the transaction using Riskless Principle transactions. Short Volume is meaningless data and is only used by regulators to track settlement of trades from trade inception to T+3. The only data tracking actual short positions is the Bi Monthly Short Interest report, CCTC has no significant short positions here. In fact FTDs are even non existent, so it eliminates the shorts as being the problem.

In fact even within the organization of FINRA it has been pointed out that the data is in fact meaningless and causes confusion for retail who in fact have no idea how to interpret the data correctly. As it was stated "shorts were 11% today", that is in fact false as the data does not show "shorts" in fact the data only shows "ownership" data on the initial leg of the transaction in accordance with SEC rule 200. FINRA reporting requirements also require on a long position trade that the riskless principle transaction report be "marked" short even though the trade is a long position trade.

This following statement paints a very clear picture:

One of the primary functions of broker-dealers is to act as intermediaries for investors that are buying or selling stock. Often, to carry out that function, broker-dealers will handle such investor orders on a riskless principal basis. A riskless sale is one in which a broker-dealer, after having received an order to sell a security, sells the security as principal, at the same price, to satisfy that order. Regulations require broker-dealers to mark their proprietary riskless sell order as short if they don't own the security, even if the customer order to sell the security is long. Since broker-dealers generally don’t maintain a position, a significant number of such riskless sales are reported as short, even though the customer is selling long, and the broker-dealer intends to and will buy the shares from the long selling customer immediately after the proprietary riskless short sale takes place. Typically, the broker-dealer's position is short for considerably less than one second.

A good example of such a transaction would be the following:

Typical everyday trade, I have 20,000 shares of CCTC for sale on the Ask, you however want to purchase 10,000 of the shares at my price. So you enter your order and it is sent to your broker to execute. First thing is a broker electronically checks to see if there are current sell orders that match your request, if not it is off to the ECN. As I stated earlier each broker has an MM working for them to execute trades, the MM for your broker sees your order and knows I have 20,000 shares for trade. Here is where MMs “create” liquidity and order flow, in this case you only want 10,000 shares, so immediately the MM sells your broker 10,000 shares short and marks the trade as “short” although you are long in the trade, this gets reported to the Daily Reg SHO report and also on the consolidated tape.

Now nearly simultaneously on a separate leg of the very same trade transaction the MM is buying the cover from my 20,000 share block, and purchases 10,000 shares from me. This gets reported in the Non Tape Transactions Report and both Non tape and consolidated tape are both sent to FINRA for balancing and reconciliation.

The Daily Reg SHO only reports how the trade was initially executed and it does not reconcile based upon the fact the trade was covered as that will be taken care of in another report. Regulators only want to know exactly how the trade was initially executed and that is it. The trade goes off to the DTC and NSCC for clearing and settlement since it is a CNS security and is cleared and settled. According to SEC reports 98% of all trades are cleared and settled within the same day of trade or T+1. Of course regulators give T+3 for settlement, that is trade day plus 3 days for settlement, once it exceeds that it becomes an FTD (Fails to Deliver).

This closing statement pretty much says it all:

Then, the daily and monthly short sale information published by FINRA would in a more meaningful way reflect true short selling activity taking place.

Simply put the data is meaningless as it offers no distinction of true short transactions and muddies the water with riskless principle transactions, which should be excluded from being marked short.

http://www.sec.gov/comments/sr-finra-2009-064/finra2009064-1.pdf

Actual Short Positions taken against CCTC:


http://www.otcmarkets.com/stock/CCTC/short-sales