A quick board search yielded one person's explanation:
Posted by: janice shell Date: Thursday, February 25, 2010 6:32:13 PM In reply to: Generic who wrote msg# 1385 Post # of 1395
I just had a talk about the new short volume list with Cameron Funkhouser at FINRA.
He explained that it's aggregate short volume, and reflects only one side of the trades in question. Trade reporting regulations allow only one side of a trade to be reported, and many of these trades have several legs. So the result may be a net long position, but the short leg gets reported.
I can't really describe it any better than that. Basically he said that there's an important distinction between aggregate short volume data and short INTEREST data, and that the short interest data give a more accurate snapshot of what's really going on.