Hi Paul Viapiano; Regarding NEON and shorting availability, some guesses...
Here's a 2-year chart of NEON from Yahoo:
quote.yahoo.com
Notice that volume increased substantially during the big drop. This sort of price movement would naturally attract a lot of daytraders and scalpers, so they would tend to dry up the available shares to short.
Since that time, the volume decreased, but it is still larger than before the drop. So maybe there is still daytrader interest in it.
One of the habits that daytraders have, is to call for shares to be available to short even if they don't actually end up shorting the stock. The reason is that you want to have the ability to make a trade on the fly, without having to wait for confirmation of availability. Borrowing shares is free, so people tend to borrow shares under the assumption that they might need them. This is done at the beginning of the day. Because of this, there is a tendency for borrowing of shares to "lag" the price action. That is, people are still borrowing the stock, but not short selling it, (or buying it), for some time after the tradable volatility is gone.
A couple more things can reduce the availability of shares to short. Big institutions can influence a stock up by moving shares into an unmargined account, or by refusing to lend them out. Also if a lot of mom & pops buy the stock in their cash accounts (i.e. IRAs), those shares are no longer available to short.
That's all I could think of. What did you have in mind?
-- Carl |
