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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Saulamanca who wrote (3323)	8/28/1999 1:35:00 PM
From: Bilow	Read Replies (2) \| Respond to of 18137

Hi Jim Bryan; Regarding the number of shares being held exceeding the float... Whenever someone shorts 100 shares of a stock, the number of shares held always exceeds the float by another 100 shares. This is because the shorter sells to someone who will then hold the stock. But that isn't the question you meant. The question is whether or not the shares that were sold short were properly borrowed. (Or sold short by a market maker who doesn't have to borrow. My guess is that on stocks that suddenly run up, a good bit of the increase in float consists of shares legally sold short, without borrowing, by market makers.) The answer to that question I do not know. I only wanted to show that the amount traded could easily exceed the float without there necessarily being anything illegal done. Of course I don't have the omniscience required to determine if everyone is playing by the rules. If the person who buys the short sold 100 shares, buys them in a margin account, (i.e. an account with a signed margin agreement), then the shares can be lent out to another short seller who can short sell them again, further increasing the number of shares held long. I don't know if this can be done repeatedly on the same day, though. My guess is that it can only be done intraday once, because the clearing firm uploads the trade reports from the brokerage houses twice per day. (I.e. at noon, and at the close.) So a change in the borrowing status of a stock could only happen intraday after the noon data upload. Anybody know the facts? -- Carl