You really need to have at least a rudimentary understanding of how shorting works and the function of a MM.
Bemax is Novice central for OTCM investors.
Here is a quick lesson in how MMs operate.
When a MM doesn't have the stock in his own inventory, he has to mark the trade "short" even though it is 99.9% of the time covered within seconds with a corresponding trade or from his own customer. Ironically, stocks that have large amounts of toxic death spiral convertible debt usually have the highest daily short volume percentages, because the MM is selling stock all day and only at the end of the trading session to they acquire the stock from their toxic convertible debt holding client. Which means at the end of the day short interest is zero because all the trades marked "short" during the day by FINRA regulation have been covered. Not a single share of short interest remains at the end of the day.
MMs do not "short" penny stocks. As part of making a market, they may have periodic short positions throughout a trading day if they fill buy orders for more shares than they have in inventory, but they also often have inventory when they fill sell orders. Having an inventory does not mean that they are going "long" any more than having a temporary net short position is "shorting." This kind of temporary short position is legal and necessary for efficient trading.
The FINRA daily short data does not show true short positions and that the Bi-Weekly report is the only reliable one. It also explains that when new shares are entering the market, they are reported as short until the stock is delivered.
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