So my colleague wifes boyfriend, who has no reddit account and wishes to have no association with you autists, has been doing some maths (or “math” for you americans, or “fun hobby time” for our chinese autists) in an attempt to back solve Short interest, using short volume & trading volume. The base idea behind his findings was that any short volume over 50% cannot be 100% covered that day… so he just thought – how much can these short boys actually cover, if all shorts opened were intended to be covered…
Here’s what he’s worked out spoiler alert:shorts r more fuk than bears
“So, I have been freaking the fuck out about this. I am of the belief that at one point, FINRA said the truth about SI%… Being 226% on the 15th of january. I had thought it was impossible to figure out what it was now, but then I started digging into the Short Volume.
At first, I had thought that it would be interesting if we could see how much they could have covered if 100% of long volume transfers went to covering shorts (Short Overflow)…
So then, I got a thought… let me manually import the short volume data since the 15th and see where this could go.
So from the FINRA report I got:
- Short Volume
- Short Exempt Volume
- Exchanged Volume (Long Volume + Short Volume)
From Yahoo Historical Data I got:
- Total Trade Volume
- Day’s Closing
- Day’s low
Then I calculated this: Total Short Volume (SV + SEV)
- Long Volume (ExV – SV)
- SV% (TSV / EV)
- Off Exchange Volume (TV – EV)
- Short Overflow (TSV – LV)
I realized that this all cost them a fuck ton.
So I said: If they covered through calls, then they as an extreme minimum paid 40$/share for them AND only would do so when GME was on the way up as it would be a waste of money otherwise. Thus I made MinimalCost of OFF-Exchange as (OEV * $40).
If they covered through Long Volume on market, then we’d be able to estimate that CONSERVATIVELY by comparing the days low to the Daily long volume (Day’s Low * LV).
Then came to the conclusion of the data:
I wrote down the FINVIZ float, the SI% from FINRA, and derived the Short Volume at the time. THEN, I made 3 tables:
- Table 1: Shows how many Shorts are there at different intervals of covering on Off-market and On-market.
- Table 2: Shows the cost of doing those coverings.
- Table 3: Shows the new SI%.
IN CONCLUSION: Using My data, I was able to derive that the 535.9% SI% being passed around would cost Short Sellers 25 BILLION DOLLARS theoretically.
The Maximum SI% can be rn is 942.06%.
It is litterally impossible for it to be under 200% rn as it would be too costly.
I believe that SI% is over 600%, as I believe that certain companies ran while they could, spending 10 billion dollars AT MOST between them all for covering.
Because you cannot justify over 20% of long volume transfers being covering, its mostly algos and day traders as for calls, I just dont see that going over 30% as its abundantly clear calls are being used against them, not for them. and even that is pushing it.
My point for my want is this: It is impossible that SI% is not more than 226% as was said on the 15th as the costs would be to great and the data is just not there to support it but instead I came to the conclusion that we are way fucking past that for simmilar reasons
NOTE: NONE OF THIS EVEN TAKES INTEREST INTO ACCOUNT FOR THEIR COSTS, IT IS ALL JUST THEORETICAL COVERING COSTS ALONE. THE DATA DOES NOT SUPPORT THEM HAVING COVERED MUCH AT ALL, YOU TAKE FROM THIS WHAT YOU WILL. I AM NOT A FINANCIAL ADVISOR DONT COME BITCHING.”
Thank you for coming to his TED talk.
TL:DR SHORTS CAN’T STOP WONT STOP SHORTING. WE GOING TO THE EDGE OF THE UNIVERSE ?
TL:DR OF THE TL:DR: shorts r kill gme is moon
This is not how it works Not saying that GME short interest is X or Y. But literally this is not how it works you really can’t use short volume to determine short interest.
INTERPRETING DAILY FINRA SHORT SALE REPORTS
Mods please don’t delete 🙂 I’ve seen a lot of posts about FINRA daily short sale reports and what it means. Importantly it doesn’t mean what you think. This isn’t FUD it’s just how market making works.
TL;DR a lot of the short volume is market makers shorting to facilitate buy orders and they immediately cover with the next trade.
-High short volume in the FINRA report actually often reflects net BUYING. This is why trying to interpret these reports is pretty much useless.
-That sounds crazy but that’s how market making works. -FINRA report is only for off exchange trades (dark pools). It’s a myth that dark pools are all institutional, your retail broker is sending trades to dark pools like Citadel, Virtu, etc.
-A MM makes money on the spread between buying and selling (obviously). What happens is – your order to buy 100 shares of GME at market gets sent to a dark pool. The MM (a computer) SHORTS you those shares at $108.793 and then BUYS those shares back at $108.791. A short of 100 shares is recorded. This also explains how you see ridiculous volumes and ridiculous # of shorts every day for a stock that has a 50M float. The MM isn’t “going short” GME. They short it for a millisecond then buy a fraction of a penny lower a millisecond later.
-So high short volume in the FINRA report (which is ONLY reflecting off exchange trades (dark pools) does NOT necessarily reflect high levels of actual shorting. It often reflects high levels of buying! Um. Like we just saw this week. Repeat that It does also does NOT reflect exchange trades.
You don’t have to believe me you can read this super interesting piece here. Generally speaking, the idea that large short volume in the report is good news for holders seems true! It’s just not for the reasons you think.
Edit: I should add it’s also just tons of algos/ HFT/ option hedging, etc.
Also btw thanks for the upvotes but the original post is now among the most upvoted “DD”s of all times in this sub. We’ve got some work to do!!!