The Finra daily short numbers primarily revolve between settled trades from the prior 3 trading days to the unsettled trades of two days and one day prior and new unsettled trades of the current day . Essentially there are 3 or 4 days involved in the Finra Short Data, one being the settlement day from 3 days ago or broker in-house buys and sells which are settled the same day, of which those settled trades are subtracted from today's Short Data, and the unsettled trades from two days ago, one day ago, both with a running tally, and the current trading day of which are added to the Finra Short Data running tally.
Unsettled trades are short sales because the bought or sold shares have not yet been settled by the Broker respresenting a retail client. Everyone knows or should know that it takes 3 days (or longer ) to settle trades in everyone's Brokerage account.
The same principle applies to the Finra UNSETTLED data, misnomered as Short Data.
Convertible debentures ( for SEC reporting companies ) or shares sold to Accredited Investors or Pipe Funders ( for OTC non-reporting companies to the SEC ) can be shorted by the lender due to conversion verbiage agreements but they DO NOT need to cover inthat they short against their discounted shares and then they receive more shares from the borrower company. That invariably means those lending agreements are toxic, sometimes death spiral financings that dilute the heck out of the diluting company's stock.
It is more complex than my ultra-simplified explanation but reasonably accurate to show that Finra's Short numbers are mostly comprised of unsettled trades and NOT short positions on OTCBB / OTC stocks.
There is NEVER a short squeeze on any OTCBB or OTC stock....NEVER !!!!!!!!!!!
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