Replies to post #27147 on Puration Inc (PURA)

[Gabriel_S]

Great post Stewy. About time the SEC stepped in to put a stop to this abusive manipulation !!!

[PRmaniac]

Short volume is not actual shorting. The daily report is misleading, at best. Scamming stock promotion firms still try to use that data to con unsuspecting investors into thinking there is significant shorting.

The current FINRA short interest, published in the bi-monthly short interest report, shows some shorting, but in an amount that can be covered in just a few trades

“The Misleading” – Daily Short Volume

In contrast, the most frequently misinterpreted data is the Daily Short Volume, sometimes referred to as Naked Short Interest. This data shows the percentage of published trade reports (called media transactions in FINRA Rules) that were marked short. As an example, the recent data for OTC Markets Group shows that up to 90% of the trading volume comes from short
selling on some days. If we did not carefully track our bi-weekly Short Interest, we could easily be led to believe that short selling is rampant in our stock.


Since this data also comes from FINRA, what gives? The daily short selling volume is misleading because market makers and principal trading firms report a large number of trades as short sales in positions that they quickly cover. For market makers with a customer order to sell, they will temporarily sell short (which gets published to the tape as a media transaction for public dissemination) and then immediately buy from their customer in a non-media transaction that is not publicly disseminated to avoid double counting share volumes. SEC guidance also mandates that almost all principal trading firms that provide liquidity at multiple price levels, or arbitrage international securities, must mark orders they enter as short, even though those firms might also have strategies that tend to flatten by end of day. Since the trade reporting process for market makers and principal trades makes the Daily Short Volume easily misleading, we do not display it on www.otcmarkets.com.



There is ample evidence that short selling contributes to efficient price formation, enhances liquidity and facilitates risk management. Experience shows that short sellers provide benefits to the overall market and investors in other important ways which include identifying and ferreting out instances of fraud and other misconduct taking place at public companies.