Im not sure I understand the question fully but here is my answer to what i think you mean:
The short report sites are really just reporting the shares sold by the market makers that have technically not been covered/delivered yet...I might add, there are literally no brokerage houses that will facilitate the short sale of a penny stocks...period (I urge anyone who doubts this to call their brokerages and ask them to short a penny/sub-penny)
The market makers often times naked sell (T3 rule allows them 3 days to cover the transaction) and usually cover quickly. The "T trades" that you see before and after hours are the facilitation of those "covers". if a market maker feels that the price is going to tank, technically they can sell and hope to cover at a lower price.....They have 3 days to do so (T3 rule again)....The only time the often touted "squeeze" comes in to play is when the MM's over/naked sell (usually during hot run that does not correct or right before one ....(AKA: Caught with pants down) leaving them stuck with only 3 days to cover their transactions (T-3 rule)....
Worst case scenario is that they issue "share IOU's" to the brokerage house that they implemented the trade on behalf of and that is where it gets sticky....In pennyland, many penny stocks in years past have been ruined by the naked short selling of shares by the market makers because they have literally not honored their trades and delivered what they sold. The SEC and/or the DTC (Depository Trust Company -if the stock is even DTC eligible) does not like to admit this because it makes them look like monkeys.
I have heard that there are new laws that have been implemented to stop the Market maker IOU abuse.
Dont like something?...Then stay away from it.
