<<More importantly, the 'short interest' reported is highly deficient as a measure, since as I've posted previously I think the behavior of the stock this spring indicated that covering of shorts at the low end of the trading range resulted in a pile of long shares that were not used to close the short position.>>
Rich, I am starting to feel like an English-challenged turnip farmer. The way I see it, Castle Creek steadily built their short position over the spring. They would short at the high end of the trading range and cover some at the low end, but always steadily increasing their short position (by shorting more shares than they covered). Assuming they were shorting and covering approximately equal number of shares as you seem to be suggesting, I still don't understand what you mean when you say this "resulted in a pile of long shares that were not used to close the short position." If they were shorting and covering approximately equal numbers of shares (and assuming nobody else was shorting), there should have been no increase in the reported short position.
<<In short, the NET short position, which is what would be meaningful, is inaccessible to us. Anything else here is just a guess. MY guess, based on observing the level 2 trading, is that the net short position actually was flat this spring, and increased dramatically this summer, even though the REPORTED short interest has it the other way around.>>
You seem to be saying here the short position did not really increase during the spring when the reported short position steadily increased. And you also seem to be saying the short position was increasing this summer faster than the reported short position. Sorry, but I don't follow this either. Maybe you can define what you mean by the NET short position. Net of what? |
