Why Short-Volume Reports Can Overstate Speculative Short Selling

Summary

The document asks why reported short-sale volume from venues such as NYSE, Nasdaq, and BATS can appear much larger than published short interest. It raises questions about differences in venue coverage and whether transactions connected to securities issuance may be reported as short sales, rather than representing speculative bearish positions. The central response is that short-volume figures include transactions beyond the speculative short selling a reader might assume they measure.

The source does not explain the reporting categories in detail, provide a breakdown of transaction types, or present a method for adjusting the data. It also does not resolve the question of how volume is distributed across venues or why the cited reports differ from a broader market-volume source. Its useful lesson is interpretive: short volume and short interest are distinct measures, and raw short-volume totals should not be read as a direct count of bearish bets. The brief answer points to an outside explanation, so the document alone offers limited evidence for evaluating the data or comparing reporting systems.

Key ideas

• Short volume and short interest measure different things and should not be treated as interchangeable.
• Reported short volume can include transactions beyond speculative short sales.
• Venue coverage and reporting definitions may affect comparisons of short-volume figures.
• The document gives no detailed transaction breakdown or method for adjusting the reported totals.

Tags

# Short selling volume reports


# Short selling volume reports












I'm researching short selling volume data reports from NYSE, NASDAQ and BATS (Sources: FINRA + BATS website). And my question is: Why are those numbers so high?

Is it really just a speculative short selling or a big piece is made from another transactions - like insider selling due Securities Act of 1933 prohibiting direct selling of securities obtained from issuer (so they are shown like shorts to regulators).

Compared to short interest (published 2 times per month) those numbers are insane.

I attach a chart with short volume as a percentage of total volume reported to FINRA and by BATS (this volume is significantly lower than total volume published by Bloomberg - what might be another reason) But distribution of short selling should be approximately same across trading venues right? (excl. darkpools of course)

## Answer by yety (score 1, accepted)

https://quant.stackexchange.com/a/36151

For those who also need an answer as I did. The explanation is here:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=57101068

TLDR: Those data are +- worthless because not only actual short sales (speculations) are included.

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.