Distinguishing Flow from Position
FINRA has issued guidance to clarify the distinction between daily short sale volume files and official short interest data. The daily files, which track trades reported to TRFs and the ADF, represent aggregate trading flow—the volume of shares sold short on a specific day.
Why the Distinction Matters
In contrast, official short interest data reflects the total number of open short positions at a specific moment in time, reported twice monthly. Market participants often mistakenly equate high daily short volume with a large open short position. However, a share can be sold short and covered within the same day, resulting in high short volume without any change to the total open short interest. Analysts must combine exchange data with FINRA's off-exchange files to obtain a complete picture of short-selling 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.