Posted by johnsyn June 19th:
ALL: Here's the explanation by another poster on a different stock thread about how FINRA's short info is bogus, changed the name of the stock example to make it easier:
"Easiest way for me to explain my statement is to just give an example:
Lets say you invested long 5000 shares of CAVR and want to sell. You enter the order through your broker, which is then routed to a market maker. The market maker will then make the sell into the market before they have actually bought the stock from your broker to close out their account. They DO NOT take possession first bc there is no guarantee they can sell the order into the market into the market right away. Because of this, the actual sale into the market is a short sale bc the market maker sold the stock in the market before they purchased it from you. As the volume we see in our daily trading sessions is taken from the consolidated tape – only the sale into the market – so too are FINRAs daily analysis. The second half of the transaction is not recorded as to not distort the volume and the trading picture.
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.
From the FINRA site:
www.finra.org/Industry/Regulation/Notices/2009/P120045 (the pdf link)
“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. “
Consolidated tape only takes into account the open market transaction or the "short sale", by definition the second part of the transaction is called a media transaction.
This is the reason why we often see the high short interest volume reports seen. Bunch of Jackwagons if you ask me..messin with our emotions lol"
