ADF and Short Sale Transparency
Regulation SHO requires the reporting of short sale trades to ensure market transparency. The Alternative Display Facility (ADF) is one of the venues where these trades are reported. FINRA aggregates this data into daily short sale volume files, which are crucial for analysts attempting to reconstruct the daily flow of short-selling activity.
Data Integrity
These files provide a granular look at the volume associated with trades reported to the ADF. While the volume on the ADF is typically lower than that of the major exchanges, it remains a necessary component of the consolidated short sale volume data. Analysts should ensure they are using the consolidated files provided by FINRA to capture the full picture of market-wide short-selling pressure, as relying on a single venue's data would result in an incomplete analysis of the day's trading activity.
Signal data sourced from FINRA. This post is an original analysis prepared by The Forensic Ledger from publicly available data. Not investment advice.
Not investment advice. This is original reporting and analysis prepared by The Forensic Ledger from publicly available data. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.