Day Tradexchange Inc. (SYNJ)

[lbdave]

It's because only one leg of the transaction gets booked. These market makers don't want to be caught holding any of these shares, so their transactions happen like this:

Trader A has 15 million shares for sale through NITE

Trader B has a 15 million share buy order placed through ETMM

If NITE buys the shares from trader A, then sells them to trader B, no shotrs have occured and the long sale is booked.

If NITE were to buy the shares from trader A, but before being able to complete the sale, trader B decides to cancel his buy order, then the MM is stuck with the shares. To prevent this from happening they will complete transactions in this order:

NITE will actually sell the 15 million shares short to trader B, then turn around and buy the shares from trader A to cover his position. They have to book this transaction as a short sale. This type of transaction in what they high daily FINRA short numbers reflect. Many peeps want to post that info daily and talk about the short squeeze that coming, but the fact is most of those transaction are covered the same day, but still have to be booked as a short sale because of the order of the transaction.

They aren't shorting just to be shorting, or trying to make money selling short. They are simply protecting themselves from getting stuck with inventory of a stock they don't want.