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Thread: Short Interest

  1. #1
    Jay Wilson is offline
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    Short Interest

    The fact that the short interest increased in March has me puzzled. It isn't just that it seems crazy to me to short this stock at this level. It seems like it should be impossible to find shares to short at this level.

    I was under the impression that you couldn't short a stock unless someone had margined against that stock in their account. Those are the shares that are lent out by the brokerage houses to the shorts. At these price levels, Sirius isn't a marginable stock is it?

    Also, I was told at some point that you couldn't short a stock below $3.00. Is that totally incorrect? I'm not sure if there was a rule change, or if I was given bad info.

    I've probably been misinformed, but with the rules I thought existed, just the fact that the short interest increased at all would prove that laws are being broken. Can someone set me straight? Thanks.

  2. #2
    kingadrock666 is offline
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    Quote Originally Posted by Jay Wilson View Post
    The fact that the short interest increased in March has me puzzled. It isn't just that it seems crazy to me to short this stock at this level. It seems like it should be impossible to find shares to short at this level.

    I was under the impression that you couldn't short a stock unless someone had margined against that stock in their account. Those are the shares that are lent out by the brokerage houses to the shorts. At these price levels, Sirius isn't a marginable stock is it?

    Also, I was told at some point that you couldn't short a stock below $3.00. Is that totally incorrect? I'm not sure if there was a rule change, or if I was given bad info.

    I've probably been misinformed, but with the rules I thought existed, just the fact that the short interest increased at all would prove that laws are being broken. Can someone set me straight? Thanks.
    well YOU and I can't short sirius right now....but WHO can?

    if you look at the time frame between march 13th and march 31st, you'll see that it was the big rush that brought us up to the .30's. they were trying to short it back down but they couldn't contain it.

    the MM's are only prolonging the inevitable.

    also, whoever shorted in that window got screwed big time.

    march 13th close was .195

    march 31st close was .34

    do the math.

  3. #3
    Jay Wilson is offline
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    If this report ends on March 31, can some of that increase still not be delivered?

    I forget, don't they have like 13 days to deliver the shares?

    Does that suggest there might be a moderate squeeze next week?

  4. #4
    kingadrock666 is offline
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    Quote Originally Posted by Jay Wilson View Post
    If this report ends on March 31, can some of that increase still not be delivered?

    I forget, don't they have like 13 days to deliver the shares?

    Does that suggest there might be a moderate squeeze next week?
    i'm not sure how long they have to cover, but i can tell you that our days-to-cover is 2.31. that's on much higher avg'd volume though. we've had a really crappy week, volume-wise.


    here's a little info on shorting:
    http://www.nasdaq.com/newscontent/20...egoryid=Stocks

    here's where you can find the short interest for every stock.
    http://www.nasdaqtrader.com/Trader.a...=ShortInterest

  5. #5
    Newman is offline
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    Jay: as King stated, people can still short companies under $3... just not you or I. Large brokerages, hedge funds, etc. can still short these companies at their pleasure.

    As far as shares available for loan: Any stock that you have IN A MARGIN ACCOUNT can be loaned by your brokerage. Read the fine print in your margin agreement, and it says it in there. You do not have to actually have any margin in use at the time, or have EVERY used margin, but if it is registered as a margin account, chances are you signed an agreement saying that your shares can be lent.

    Know what the best part is? The brokerage gets paid a commission for loaning out your shares. You simply get the privelage of buying on margin, for which you must also pay interest. Aren't the brokerages wanderful people?

    Your only recourse to this is to call up your broker. If you use margin on a regular basis, open up a second account that is non-margin and transfer your SIRI stock to that account. If you do not use margin, simply cancel your margin agreement and switch back to a regular account. If you consistantly maintain a large balance (minimum 25k) and trade actively (minimum 25-50 trades per month), you may also be able to talk your brokerage in to cutting you in on the commission for loaning out your shares, but that is often a stretch.

    Hope the information helps.

  6. #6
    Jay Wilson is offline
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    Thanks...

    Thanks guys.

    I thought of one reason why it might make sense for someone to short SIRI down here.

    There may have been some kind of arbitrage play in shorting SIRI and going long on LCAPA. Basically, LCAPA hadn't come up as much as it should have after the deal closed with SIRI. Maybe now that that gap is closing, they will both move up more together.

  7. #7
    sxminvestor is offline
    Let the shorts load up.

    They will get burnt badly in the next 3 -4 quarters by Mel cost cutting, bringing out the synergies, OEM revival, retail revival, Iphone app.

    Expect Sirius to start to market Fathers Day and then a big push this holiday season - new exciting hardware will be coming as well.

    Profit is not far away.

  8. #8
    LMaze is offline
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    Newman: thanks for the info on shorting. I have assembled a margin free portfolio of Sirius XM throughout the last few years, more so now at these prices since I have been buying at least ten thousand shares per week since the price hit eleven cents and I bought 400,000 shares in the .17-.20 price range. The price even at .35 is so cheap! I'm looking to buy more today. That said I will ask my broker to open a seperate account just to hold the SiriusXM so that it can't be loaned out. Once again thanks and happy holiday to you

  9. Ad Fairy Senior Member

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