If someone was short 10000 shares and on that day 100000 traded than it is 10% of daily volume is open as shorts. Next day same 10000 shorts are open and the daily trade volume is only 2500 shares . So 400% of daily volume is shown as teh % number.
Same number of short open position just a change is daily volume. All the volume on 2nd day ( if any) may have traded via chix for example.
It is a ratio / number used to indicate if there was a short squeeze and shorts had to buy back ho many days of average volume it would take for them to close out.
It is a very poor indicator for many reasons.
Follow the total number of shorts. As flawed as that number is for many reasons it is all you have. Don't put too much weight on it as it is flawed. Work out yourself what the usual daily volume is . Think about if there was " news" that would make a short position what the daily volume would likely be. That is the real number of days and the real liquidity shorts have to cover their position in. Rarely does a short holder get " trapped" and unable to buy ( at some price however inflated). Remember volume attracts volume and news attracts volume as technical trader look for it and then go in on the back of it as a momentum trade .
Do your self a ratio of volume shorted v's real liquid stock so it shows all stock not caught in escrow arrangements Do short positions v's daily trading volume on historic news release days Do worst case of short volume v's low volume days for max buy back period that assumes sellers at any price won't appear. Knowing of course that the player caught short could be buying stock of a new shorter who sees the blip upwards as a shorting opportunity.
Realise that few people actually research SPL let alone do enough to do a large scale short with risk involved and some that are are actually long term holders who own stock and are just leveraging a income from SPL stock while awaiting some future news . Yes they are long and short at the same time but keep their CGT exemption on core holding.
Shorting has many strategy not like many assume
SPL Price at posting:
$1.28 Sentiment: None Disclosure: Not Held
