Replies to post #89776 on Innovation Pharmaceuticals Inc (IPIX)

[Waverunner1]

I thought it was self explanatory, I'm not sure I can do any better on a rehash. I think Karin will understand what I am saying. No, not short. I think it would be very unwise to short this stock... or at least to hold overnight short. With the right news you could easily wake up one morning to a triple digit loss.

[BooDog]

It's difficult enough to get the data on short interest that can be copied from a site, to do much better you would need to see the MM transactions. Especially on the OTC. There use to be more sites that you could track even the price transaction a block was shorted. Don't think we can access that anymore. Not in my shortcuts anyway. Maybe the DTCC? No idea anymore.
Simply DAILY Vs. cumulative that we see posted on NASDAQ on a 15 day period for the big boards. I think the site Karin used is for a daily, not an average or cumulative. I didn't "eat" much into it since I was more into the narrative and the overall point she was making. Another useful resource though. :-) If I confused you, try reading Waverunner1's answer again. He made sense to me. otcshortreports and shortsqueeze should be looked at separately.


58

Speaking of shorts, I don't understand your point. Please explain.

about "Waverunner1"

Nice article. FWIW I'm not sure you are using the short data correctly.....you are initially looking at the change in cumulative short interest and dividing that by number of trading days to come up with a daily average over the period but then you are comparing that to daily short figures. The issue here is that most of the shorting is done on a daily basis and not held overnight, hence large daily figures but not much change in the cumulative short interest at each reporting period. My hunch is that the daily figures are fairly similar and consistent in the months prior to the dates given in the chart you posted. Do you have that data?

(This is definitely not meant to suggest there wasn't manipulative short selling around the previous SA articles, just that it can be very difficult to decipher).

[loanranger]

A couple of years ago FINRA began publishing a report called the Daily Short Sales Volume Report. It was supposed to enhance the transparency of the mechanics involved in market maker activities, but instead it has caused nothing but confusion since it became publicly available. Some of that confusion surfaced in Karin's article.

Short interest for all public companies is reported twice a month in something called the Bi-Weekly Short Interest Report. The number in that report represents the number of shares that have been sold short but not yet covered. In terms of trying to assess how the short side of the market is viewing a stock, it's the only source of valuable information.
A few reports have been issued since Karin's article. Here are the numbers for the last 4 weeks:
12/1 - 874,458
12/15 - 1,201,499
12/31 - 1,161,317
1/15 - 1,319,833
Finra shows an average daily volume of 813,302 shares, which results in 1.62 days to cover (short position/avg daily vol.). Basically this means that, if everyone with short positions were to cover (and there was no other trading activity...obviously it's just a statistic without a likelihood of actually occurring), all of the short positions would be covered in 1.62 trading days.
If you take a look at some other companies you'll find that that is a relatively small number, which can be interpreted to mean that the market doesn't find it an attractive stock to short. It also means that should an extremely positive piece of news come along the resultant covering of short positions isn't likely to have an explosive effect on the share price. Positive yes, explosive no...the short interest just isn't big enough to do that.

Unfortunately, and ironically, the Daily Short Sales Volume report does not give a clear picture at all of the actual short positions reported in the bi-weekly report. The volume report includes market maker activities that don't relate to what we normally think of as short selling. I can't do the explanation justice, but suffice it to say that one would be wise to totally ignore the Daily Short Sales Volume report and any of the websites that present that data as if it actually represents short selling that leads to short positions....it doesn't. In fact, with a little bit of effort you can find days where the share price movement seems totally at odds with the "short volume". Take a look at January 20 in the table in Karin's article for instance...how much sense would it make for the price to close within a penny of the high for the day if 43% of the trades were sales sold short?

None of this is meant to disparage Karin's article in any way. I understand the desire of investors to fight back against articles like the last poorly crafted bash, but I felt that the issue of the actual short positions in CTIX could use some clarification, especially in regard to the use of short volume data in support of ANYTHING...it's of no value at all.

Hope this helps a little.


GL.



edit:
Get the data right from the horse's mouth.
http://otce.finra.org/ESI