Larry,
The actual monthly published short figures are indeed reliable. However, they can be misleading in a number of ways:
1. There can be offsetting positions in a convertible. Thus the owner of a convertible can lock in a gain by shorting the stock. This produces misleadingly high short figures.
2. There can be an offsetting position in the options market - e.g., someone can be short the stock but be long even more calls, and so be net long.
3. Market maker short positions are not disclosed. Normally, MM's are not short for long. However, a market maker (like Goldman Sachs) can do a side deal with a hedge fund (for example a "collar") that they then offset with a (non-disclosed) short position. Here the fund is basically short, but because the position is held indirectly, it is not disclosed. James Cramer at TSC recently had a good article discussing this issue.
4. Sometimes the short player can themselves be a market maker. Avalon, who apparently has a short position in CLTR, is a good example.
5. Offshore funds/brokers may not disclose their short position.
6. If you are short in between the monthly disclosures, this will never be disclosed.
Peter |
