Thank You. I now know why my request to FINRA's Office of the Ombudsman for a written response to this question seems to have been ignored.
A little further clarification, please.
This makes great sense:
"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."
But it leaves me wondering:
1. Are the trades described above handled the way they are because because of a concern on the MM's part that thin trading in the issue may result in difficulty finding a buyer? Or is it an issue of the right price?
2. In cases where there is not a concern about finding a buyer does the MM make the buy from the original seller immediately, resulting in that sale being one of those represented by the difference between "short volume" and total volume" in the report?
3. Can we assume that a short trade, as we normally understand it, is part of the "short volume" on the report?
4. Are the implications of your "discovery" that the fact that "short volume" tends to be a larger percentage of "total volume" in some issues results to a large degree from liquidity and execution concerns on the part of the market makers rather than actual short sales as we know them?
5. If so, what would explain the same high ratios in large cap stocks where there would presumably be no reason for the market maker not to do the buy himself immediately?
If that's not a reasonable set of questions, how about just trying to explain the nature of the trades that ARE in the total volume but ARE NOT in the short trade volume?
I appreciate your efforts.....but I personally still can't put the pieces together. Obviously.
