Well lets look at that, the short interest currently reported for the end period of May 15th is the following:
1,684,477……………. –17.70%………… 5,229,891………….. 1.00
So someone shorted this security 1.7 million shares during the 15 day period from 1-15 May, 2012. On the best price during that period that would equate to a whole $3230 worth of securities at .0019 using , 1,700,000 shares. The lowest price achieved is .0016 so they bought at $2720… Wow a whole $500 potentially made.
In the grand scheme of things that $3230 worth of securities shorted over that 15 day period amounts to squat compared to the 100 million shares traded over the same period of time. That is 1.7% of total trading volume which has no effect on trading here.
You are correct daily short volume means nothing here as a single data set as one must take the time and track FTDs at the same time to see if there is a short issue. A good example is here back at the end of December into January, there was a significant short problem. As a result of that the Reg SHO Threshold Flags were popped for 10 days. It is also why the security popped as well as it did.
When it comes to Short Interest however you bungled the statement, it is that there rarely if ever exists enough short interest in a security to make an impact. It is nearly impossible to short a penny stock significantly to effect trading due to the excessive margin requirements of either $2.50 per share or 100% of total trade value which ever is greater and in this case it would be the $2.50 margin.
So who would be shorting this, in the majority of cases it is in fact the same people who are holding the large blocks, not only making money on selling their shares but shorting due to the pressure they create.
AI
