Sirius XM Short interest is once again on the rise. As of April 30, 2010, short interest in the equity went up for the third consecutive period, and now stands at 160,482,632 shares. This represents an almost 22% gain over the April 15th data. While this number may seem massive, the real issue when looking at the short position is the number of days it would take to cover that short position. The more days it takes to cover, the bigger the potential “short squeeze”. This is not to say that a short squeeze will happen.

The “days-to-cover” is a metric that considers the average volume over the reporting period (typically about 15 days). Sirius XM’s volume has dried up. Since February, the “days-to-cover” metric for Sirius XM’s short position has been 1 day. That changed with the latest number, and now it would take twice as long to cover the short side. This is interesting information, but not yet compelling. Over the past year, Sirius XM once stood at 7.35 days to cover.

Short positions in a company are normal. The average short position in Sirius XM over the past year is about 107,000,000 shares. Thus, interest is higher than average. Interestingly, Sirius XM, at 160,000,00 shares short, is getting back to short interest levels that were seen one year ago, when there was a similar days-to-cover ratio.

The highest short interest in the past year was 194,820,020 at the end of June, 2009. The highest days-to-cover ratio was 7.36 on June 15, 2009. The highest average volume was 256,383,393 shares traded only a few weeks ago for the April 15th reporting period.

This could prove interesting with the Russell Re-balance

Position – Long Sirius XM Radio