Replies to post #3186 on Tronox Inc. (TROX)

[everett7]

There's no way to tell because you can never know how many are covered on any given day (generally they are required to be covered within a few days). But I'd say percentage-wise, at least 30-80% of volume every day has been reported as being naked short shares over the past few weeks.

[uhlmant]

I am not sure there is a way to tell for sure. However, using some logic and conservative assumptions we could probably assume that during any given day all a MM would try to cover all naked shorts created that day.

For example
5k short out of 50k traded.
We could assume that at the end of the day those 5k shares were covered.

So during a day like yesterday could look like this:

22k short out of 28k total traded
assuming they could only cover (28-22 = 6k) 6k shares, then 16k are still open and rolled over to today.

This assumes that the MM tried to cover all of the 22k naked shares that were created. Its possible none of them where covered. What we do know is that an absolute MINIMUM there were 16k NEW naked shorts created just yesterday alone.


HOW many days has this happened? Don't know

I am assuming that all the shorts listed on any given day are partially covered. This couldn't account for actual buying since the MM's would have to buy shares to make up for the naked shorts they created.

Wonder how many of my shares some MM went in the hole to create. Once this starts moving, there is likely to be ALOT of buying of real shares to make up naked shares they sold. Theoretically there could be 50M shares out there with only ~42M fully clothed shares in existance.

Anyone care to comment...did i get the mechanics correct?