Issues With Short Interest Reporting

Hey Everyone,

Given yesterday’s fiasco regarding the different SI %'s being reported as a “glitch”, I found TDAmeritrade’s response very interesting.

As per TD Ameritrade’s official Twitter:

“We apologize for the confusion! Given the numbers from our “fundamentals” page, 96.7MM “Short Interest” / 514M “shares outstanding” = 18.83% of float. Our technical support is working with our vendors to verify this information. We thank you for your patience! ^JD”

At first glance, I thought nothing of this tweet considering it being uniform to everything we know about how short interest is reported. However, my favorite document to review (REGSHO) states a few interesting things regarding how short positions are opened…

As per the SEC’s RegSHO Final Amendments (pg.50):

“…we recognize the ability to obtain a short position through the use of derivative products such as options, futures, contracts for differences, warrants, CDS or other swaps (so-called “synthetic short sales”) or other instruments (such as inverse leveraged exchange-traded funds)…

Purely me thinking aloud, but given the fact that, as defined by TD, short interest is merely a calculation of “shares shorted” / “shares outstanding”, how does this factor in short positions obtained through the other methods that the SEC itself has said are available?

I am curious what the short interest would be if it accounted for “shares shorted” in addition to the other methods available (also think about how much $$ is in derivatives versus traditional equity markets…)

If anyone has any additional information or input please feel free to share/comment/add!

Reg Sho:

TD’s Tweet:

BAM Investor is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. Our discussions, analysis and predictions are derived by our interpretation of our proprietary model’s readings, and should not be misconstrued as an investment recommendation or advice in any form. It should be clearly understood by anyone viewing this site or related materials that investing in the stock market carries with it inherent risks and uncertainties. The actual results of a stock or commodity or currency could differ materially from descriptions given. There is a risk for substantial losses trading securities and commodities. Material and commentary provided is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities.

The information contained on this website and any subsequent reports or articles are based on analysis of qualitative, statistical, and financial data and should not be interpreted as recommendations based on a complete investment evaluation. The information is based on sources that BAMinvestor believes to be reliable, but no representation, express or implied, is made with respect to the accuracy, completeness, reliability, or timeliness. The information is subject to change without notice, and BAMinvestor does not accept responsibility to update it.

BAMinvestor does not accept responsibility or liability for any direct, indirect, special, consequential, or other losses or damages of any kind whatsoever arising out of access to, or use of, any reports or information contained in it.

Principals or employees of BAMinvestor may have a position in, and may from time to time purchase or sell, securities of any company discussed in this report.