Replies to post #9504 on Cache Inc (CACH)

[VeronicaFox]

SHORT VOLUME & SHORT INTEREST are 2 different things.

In 2010 FINRA began publishing its daily short volume lists. It didn't want to; it was forced to do it by the SEC. Anyone who called FINRA at the time was given an explanation about trade reporting, and told to ignore the short volume reports and pay attention to the bi-monthly short interest reports, also compiled by FINRA. Jess Haberman, a compliance specialist who'd once worked for FINRA, contributed a comment to the SEC in which he said, among other things:

“The purpose of this comment letter is to raise a concern about the data FINRA proposes to publish. The filing notes that the "SEC staff stated that it believes that the publication of this data, and the resulting increased market transparency, may help bolster investor confidence and thereby help promote capital formation."

This is a laudatory goal. However, it is important to note several factors about the data that may impact market transparency, and therefore investor confidence, relating to Commission and FINRA reporting requirements. These factors are in addition to the possible data imperfections pointed out by FINRA in the filing. Presumably the intent of daily and monthly short sale information is to make transparent the volume of stock actually sold short, thus impacting the amount of short interest in the security, and reflective of the amount of stock that must be borrowed. However, with respect to broker-dealer proprietary sales, especially when acting in the capacity of market makers and block positioners, such trade volume information may not always depict accurately the quantity of stock sold short. It may tend to over-count such volume, and therefore, if published, unnecessarily impact investor confidence in an unforeseen way. To be clear, I am not suggesting that no data be published. Rather, the Commission and FINRA should consider reviewing and addressing short sale recording and reporting requirements so they are more meaningful.

One of the primary functions of broker-dealers is to act as intermediaries for investors that are buying or selling stock. Often, to carry out that function, broker- dealers will handle such investor orders on a riskless principal basis.

A riskless sale is one in which a broker-dealer, after having received an order to sell a security, sells the security as principal, at the same price, to satisfy that order. Regulations require broker-dealers to mark their proprietary riskless sell order as short if they don't own the security, even if the customer order to sell the security is long. Since broker- dealers generally don’t maintain a position, a significant number of such riskless sales are reported as short, even though the customer is selling long, and the broker-dealer intends to and will buy the shares from the long selling customer immediately after the proprietary riskless short sale takes place. Typically, the broker-dealer's position is short for considerably less than one second.”

https://www.sec.gov/comments/sr-finra-2009-064/finra2009064-1.pdf

Jess Haberman, a 16-year Fidessa veteran, started his career with the National Association of Securities Dealers (now FINRA), and also held compliance positions with several broker-dealers. As one of the biggest regulatory projects that the industry has ever undertaken, Haberman said CAT will require more effort than previous initiatives because it impacts many more industry participants, including front and back office providers and every broker-dealer and exchange that receives or creates orders in equities and options.

I understand the difference,

THOROUGH DD IS IMPERATIVE

DON’T BE FOOLED

[DJ Ponder]

Good grief its a stock promotion website for crying out loud.
The pos uses the irrelevant short "volume" to support its short nonsense.
Its short "interest" that federal securities regulators inform the public refer to.
Educate yourself ....