Tracking short interest

[Mario Kadastik]

Like 85% interest rate or so vs. 4.5% now , also about 30m shares short, but days to cover was about 8 vs. 2 now.

Ok, thanks, that indeed indicates that while we may have a similar size of the float short the impact probably is smaller due to faster coverage. Still, it's squeeze material And I don't necessarily mind them shorting as long as the shorting is slow and steady at a sideways moving price until a catalyst.

 

[TSLAopt]

Ok, thanks, that indeed indicates that while we may have a similar size of the float short the impact probably is smaller due to faster coverage. Still, it's squeeze material And I don't necessarily mind them shorting as long as the shorting is slow and steady at a sideways moving price until a catalyst.

The "days to cover" is almost meaningless these days. It is derived directly from the daily average trading volume. Daily average volume is much higher for TSLA now than in early 2013 because of all the extra day trading and HFT that now goes on in TSLA. Day trading and HFT algos account for much more of the daily volume than they did back in early 2013. These HFT algos and day traders don't hold positions overnight, they buy/sell intraday and often times intra second/minute, especially the HFT algos.
If I had to guess I would say maybe 50% of average daily volume was HFT/day traders before the first short squeeze and 80-90% of average daily volume is HFT/day traders now.

Other than this, it's important to keep in mind when an institution buys or sells a large chunk of shares they usually use algos now that will often buy/sell continuously throughout the day to fight off the other HFT algos and just end the day net buying or net selling the chunk of shares that the institution wants to buy or unload.

Because of the above two items I would render the "days to cover" statistic very misleading and borderline meaningless.

in terms of borrow fees, the 85% earlier in the year was somewhat of an anomaly and will likely never go that high again for TSLA, stock lending is not as transparent of a supply/demand driven market as people often assume (like stock prices).

having said all this, the most important stat that matters far more than any others is how many shares are short, and as of the last report it's abut 30mm shares short which is very very good for us hoping for a short squeeze. If it somehow goes to 35mm (would be a record I believe as previously I believe it was 32-33mm at the highest back in mid March) then I would guess that a short squeeze is imminent and I'd start buying short term OTM call options again myself.

 

[adiggs]

Another observation that others have made about short interest - note that 30M shares short at $140 represents a whole lot more $$ at risk than 30M shares short at $40 (or whatever level you prefer to use previously). Comparing shares short at widely varying points in time can be a misleading indicator of the short interest with a stock like Tesla that has moved so far in such a short time.

What you do with that observation - heck, I'm not even really sure myself, except that as a long investor, I find that I derive a perverse pleasure from seeing high levels of short interest; it seems to lead to good things.

 

[sleepyhead]

Another observation that others have made about short interest - note that 30M shares short at $140 represents a whole lot more $$ at risk than 30M shares short at $40 (or whatever level you prefer to use previously). Comparing shares short at widely varying points in time can be a misleading indicator of the short interest with a stock like Tesla that has moved so far in such a short time.

What you do with that observation - heck, I'm not even really sure myself, except that as a long investor, I find that I derive a perverse pleasure from seeing high levels of short interest; it seems to lead to good things.

I pointed this out already before, but statistically and historically stocks with high short interest tend to go down. Only 2013 has been a year in which shorts got slaughtered, and it has been and anomaly. So be careful what you wish for.

That said, I still invest in TSLA confidently because every now and then the shorts get it wrong, but in general they are a smart group of investors.

 

[mershaw2001]

I pointed this out already before, but statistically and historically stocks with high short interest tend to go down. Only 2013 has been a year in which shorts got slaughtered, and it has been and anomaly. So be careful what you wish for.

That said, I still invest in TSLA confidently because every now and then the shorts get it wrong, but in general they are a smart group of investors.

I actually think that the data support the claim "stocks with higher short interest underperform their peers with lower short interest". Not "stocks with high short interest go down".

 

[sleepyhead]

I actually think that the data support the claim "stocks with higher short interest underperform their peers with lower short interest". Not "stocks with high short interest go down".

Thanks. That is what I meant to say.

 

[Bgarret]

I actually think that the data support the claim "stocks with higher short interest underperform their peers with lower short interest". Not "stocks with high short interest go down".

Interesting to try to identify Tesla's "peers" against whom you would benchmark their performance. As far as the intelligence of the shorts, I wouldn't handicap them above any other group of professional investors...just that many of them seem more angry, more bitter. A large short fund manager was on CNBC yesterday railing against all solar, Tesla and 3d printing and essentially making stuff up...he was telling the lies about solar demand shrinking and tesla reservations drying up with equal parts conviction and anger. It made you wonder if short wasn't an all-inclusive description of the man.

 

[kenliles]

It made you wonder if short wasn't an all-inclusive description of the man.

hilarious

 

[TSLAopt]

hilarious

Short squeeze today on NHTSA news? Not a huge news piece but seems like it could be enough to pop the short bubble and create a short squeeze type move up.

 

[kenliles]

Short squeeze today on NHTSA news? Not a huge news piece but seems like it could be enough to pop the short bubble and create a short squeeze type move up.

Possible but I'm thinking not quite there. One of those close but no cigar. I see that happening closer to report lead up late jam, early feb. Convergence of catalyst. Q report , 2014 guidance, Detroit show, NHTSA reality report

 

[DaveT]

Short interest as of 12/13/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 12/13/13 settled date is reflective of short interest as the end of trading on 12/10/13.

So as of 12/10/13, 30.34m out of 80.91m shares of the float were short OR 37.5% of the float was short.

Settlement Date	Short Interest	Avg Daily Share Volume	Days To Cover	Stock price (3 days before settlement date)
12/13/2013	30,343,842	11,309,668	2.683000	142.19
11/29/2013	29,155,653	14,276,160	2.042262	120.84
11/15/2013	25,390,455	16,974,121	1.495833	137.80
10/31/2013	21,419,497	9,851,553	2.174225	162.86
10/15/2013	20,813,894	13,356,976	1.558279	172.93
9/30/2013	20,931,318	8,540,203	2.450916	185.24

 

[sleepyhead]

Short interest as of 12/13/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 12/13/13 settled date is reflective of short interest as the end of trading on 12/10/13.

So as of 12/10/13, 30.34m out of 80.91m shares of the float were short OR 37.5% of the float was short.

Settlement Date	Short Interest	Avg Daily Share Volume	Days To Cover
12/13/2013	30,343,842	11,309,668	11,309,668
11/29/2013	29,155,653	14,276,160	2.042262
11/15/2013	25,390,455	16,974,121	1.495833
10/31/2013	21,419,497	9,851,553	2.174225
10/15/2013	20,813,894	13,356,976	1.558279
9/30/2013	20,931,318	8,540,203	2.450916

Thanks.

Days to cover should be 2.683000

 

[DaveT]

Days to cover should be 2.683000

Thanks for pointing that out. Just made the edit.

 

[kenliles]

So as of 12/10/13, 30.34m out of 80.91m shares of the float were short OR 37.5% of the float was short.

Excellent data point. Thank You Dave
This is getting to be substantial again. As a long I'm glad to see it.

Happy Holidays and Merry Christmas to all
(And thanks for all your recent posts Sleepy - very helpful!)

 

[MikeC]

This means the rise from 120 to 140 was not shorts covering. I'm thinking 2014 will be a good year.

 

[Causalien]

Awesome, thanks DaveT. These looks like new shorts as they seem to have increased position even after sentiment turned.

 

[vgrinshpun]

Thanks DaveT, this is excellent piece of news indeed. I would love for the proceeds of the second short squeeze to pay for my family's Model X, the same way as proceeds from the first one payed for our Model S.

 

[DaveT]

Short interest as of 12/31/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 12/31/13 settled date is reflective of short interest as the end of trading on 12/26/13.

So as of 12/26/13, 31.65m out of 80.91m shares of the float were short OR 39.1% of the float was short.

Settlement Date	Short Interest	Avg Daily Share Volume	Days To Cover	Stock price (3 days before settlement date)
12/31/2013	31,648,868	7,752,710	4.082297	155.50
12/13/2013	30,343,842	11,309,668	2.683000	142.19
11/29/2013	29,155,653	14,276,160	2.042262	120.84
11/15/2013	25,390,455	16,974,121	1.495833	137.80
10/31/2013	21,419,497	9,851,553	2.174225	162.86
10/15/2013	20,813,894	13,356,976	1.558279	172.93

 

[TSLAopt]

Short interest as of 12/31/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 12/31/13 settled date is reflective of short interest as the end of trading on 12/26/13.

So as of 12/26/13, 31.65m out of 80.91m shares of the float were short OR 39.1% of the float was short.

Settlement Date	Short Interest	Avg Daily Share Volume	Days To Cover	Stock price (3 days before settlement date)
12/31/2013	31,648,868	7,752,710	4.082297	155.50
12/13/2013	30,343,842	11,309,668	2.683000	142.19
11/29/2013	29,155,653	14,276,160	2.042262	120.84
11/15/2013	25,390,455	16,974,121	1.495833	137.80
10/31/2013	21,419,497	9,851,553	2.174225	162.86
10/15/2013	20,813,894	13,356,976	1.558279	172.93

This is incredible! I am very excited that the short interest has been going up so much (despite the stock continuing to bounce back).
We're almost at another All Time High for short interest, a year ago it was about 32.3mm I believe which I thnk was the all time high.

This should be a great year for TSLA stock when this next short squeeze occurs....I think we can all agree that the stock is not going to sit where it is for very long (140-160 range). It's either going to spring out of it with a incredible short squeeze again to help catapult it or go down temporarily on some bad news but not too low of a floor with so many shorts covering to help provide a floor.

Every single share sold short will have to be bought back sooner or later.

 

[772]

Some strange questions below, but hoping some people with knowledge can help me out...

1. To what extent does the SEC enforce their 'failure to deliver'/naked short-selling rules?

2. In cases of failure to deliver, the National Securities Clearing Corporation (NSCC) -- the clearing house that settles most trades in the US -- can step in, purchase shares on the open market and deliver the shares themselves, then bill the seller for the cost + an additional fee, correct?

3. If played by the rules, when shares are shorted, the shares must be borrowed from somewhere. Either the broker must have them available, borrow additional shares from somewhere else for a fee, or not permit the client's order (correct?).

4. When the loaner of the borrowed shares wants to sell their shares, or have them delivered in physical certificate form, the shares must be returned by the borrower (shorter), correct?

5. So, in theory, could a bunch of long-term investors converting their shares to physical certificates cause a short squeeze? As I understand this SEC page, physical stock certificates cannot be used as collateral by your broker (unless you want to apply them as collateral?). So, I assume they would no longer be able to loan out those shares.

6. Would the same thing happen if you just moved your shares from a margin account to a cash account? Can the broker loan your shares out if they are in a cash account?

Much thanks in advance to anyone who can answer these questions. :smile: