H. T. Love's  Instablog

H. T. Love
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Spent over 30 years in computer systems work, many different functions. Owned my own business for awhile. Got tired of it (managing employees is not my baliwick) and stopped doing it professionally. Did other things, off and on, for some more years and finally bumped into this investing/trading... More
  • AXPW Daily Short Sales, Price And Volume 48 comments
    Jan 24, 2012 10:48 PM | about stocks: AXPW

    I've been interested in the mechanical operations and effects of market-makers, with regards to short sales, for some time. I have come to believe that in non-catalyst environments the market-makers have a big effect on share-price. I also believe that when they find themselves severely out of a market-neutral position, or desirous of stimulating activity to make some money, they move price around, to their benefit and the detriment of the typical investor.

    A little note about the data I've used is in order.

    FINRA and the SEC require that all short sales be marked as such. If the market-maker sells shares not in his portfolio, he must flag them as short sales even though the sale may be in response to an order from a organization that holds the shares and delivery would normally occur in the normal settlement time of three trading days.

    There are exceptions and John Petersen has pointed out one. Many of the long-term original holders of Axion have physical certificates that must be converted to electronic form and registered in street name, which takes some time, to eventually arrive under the market-maker's control. Then, I presume, either the market-maker's position is netted via some DTCC process or the market maker may have done covering buys for some or all of the shares that were originally shorted.

    In the latter case the market-maker would (possibly) have a net-long position when shares backing the order arrive. In this case the shares can be sold into the market, netting some additional profit for the market maker if the market-maker's cost for the shares was lower than what they can be sold for. Keep in mind that the market-maker made money on the naked short sale, which may have depressed prices, possibly allowing a covering buy at a price lower than the naked-short sale price.

    In summary, even though the market-maker is allowed to naked short and sale may have been in response to a sell order for which the shares were real and owned by somebody (individual, institution, broker, ...), they still must flag those sales as short if not currently under the control of the market-maker. These are not real shorts as we would typically think of them, but are rather just a temporary effect of the market-maker providing liquidity, often in response to buy or sell orders.

    Now, this activity is reported daily by FINRA and other organizations. The numbers will never match the semi-monthly reports because covering buys and netting by the DTCC are not reported. So the supposed transparency provided by the daily reports is non-existent to the normal user and useless for normal analysis for investing or trading purposes.

    But if one can gain enough insight into the mechanics of the market-maker operations, it may be that useful patterns emerge in the available data.

    The charts below are posted in an attempt to identify patterns that may prove useful.

    I've not carefully analyzed them yet, but a cursory examination seems to suggest that some patterns and correlations exist that may be useful. My purpose in posting them is to let as many folks as possible examine them and help identify useful patterns and correlations, if there are any.

    First, some caveats.

    I had to manually coalesce several disparate data sources so the opportunity for error is large. If you spot any errors, please let me know and I'll attempt to correct them quickly.

    Second, I'm rather inept at the creation of this stuff and only passingly familiar with how to do all the things to make the chart I would've liked to end up with. So what I've got is a little "kludgy".

    In order to get as much detail as possible (and leave the results without too much clutter) I've made charts of two months each with an extra week bracketing the period of interest, for context. I've also selected only data that I hope will be useful in combination - stuff normally available from traditional charting is mostly not included.

    You can download the charts with a right-click and save them for viewing in a local facility, such as a slide-show presentation, your browser or whatever. You can then print them (or even print without downloading) for more convenient and detailed examination.

    The last one in the series will be aperiodically updated and a new chart added at as the first chart about every two months as long as my interest holds.

    Comments are welcome to help identify any useful patterns. When, and if, there seems to be some agreement that some useful patterns have been found, I'll post a summary, with links to the comments ahead of the charts.

    Suggestions for improving this presentation are welcome. One I can envision is breaking up future post to reduce loading time.

    I already plan to add the buy sell ratios I've been collecting to see if that is useful, but I only have a few(?) months of that.

    I'm hoping to obtain some dates of major catalytic events as well so that behavior around those periods can be differentiated from other times, if necessary.

    If anybody wants the spreadsheets, which also contain the charts, send me a private message on SA with your e-mail address and what format (e.g. MS Excel 2007) and if OpenOffice, which I use, supports it, I'll send the stuff on. If you would like them in a zip file, state so.

    If you elect to receive the files, make improvements and offer them, I'll gratefully accept your help and consider replacing my stuff with your versions.

    As of this moment (1/24/2012), the size totals about 1.7M. I'll be adding the buy:sell ratios to some of the later charts as time permits, which might marginally increase the size. I think I started collecting that in November(?) 2011 or so.

    Some things to know about the charts:
    - Left Y axis relates to price, right to short percentage (and buy:sell when added),
    - to expose as much detail as possible, scales are adjusted for each chart,
    - Legend high and low are share price extremes for the day,
    - Legend Sh % is the percentage of volume flagged as short sales,
    - Legends 10D & 25D AVS are 10 & 25 day average short percentage,
    - the volume columns have a bit of "creep", left-to-right - be alert to that.

    That's all I can think of. Suggestions are welcome. Help in examining the charts and comments are welcomed as well.

    HardToLove

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2012 January and February

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 November and December

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 September and October

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 July and August

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 May and June

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 March and April

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2011 January and February

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2010 November and December

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2010 September and October

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2010 July and August

    (Click to enlarge the chart)
    AXPW Daily Short Sales 2010 May and June

    Disclosure: I am long AXPW.

    Stocks: AXPW
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Comments (48)
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  • Stilldazed
    , contributor
    Comments (3401) | Send Message
     
    Wow, that's awesome. Do you have fingers and hair left?
    25 Jan 2012, 01:38 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Fingers yes, hair not so much. Notice that my avatar chops off just above the forehead? :-))

     

    HardToLove
    25 Jan 2012, 07:48 AM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    Its a little-gnome fact that the functioning of high powered brains burn up the hair roots and kill off the thatch.
    25 Jan 2012, 04:10 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » TB: I was blaming it on that for years. But then I heard a better one, from the male ego POV: too many headboards! :-))

     

    HardToLove
    25 Jan 2012, 04:18 PM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    LOL, good one.
    25 Jan 2012, 04:23 PM Reply Like
  • bazooooka
    , contributor
    Comments (3662) | Send Message
     
    HTL,

     

    I like your work. There are correlations here for sure. However, I think you'll be drawing all new charts very soon as the price range and MMs will have to give way to the demand overwhelming sales volume. The count down is under way by my reading of the data.
    25 Jan 2012, 03:39 AM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    HTL,
    Thanks for all your hard work. I'm trying to get myself up to speed on MM's and will attempt to make a positive contribution.
    25 Jan 2012, 03:57 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Thanks!Since the charts are generated from spreadsheets, all I have to do is add data to the latest and maybe change the scale on the left and right.

     

    After what it took to make the initial versions (first include too much data, do it all on one chart, scale back data, break charts into two-month presentations, try and get it visually useful - the hardest part as I'm challenged in visual areas, fight SA's tools, ...) keeping current will be duck soup.

     

    All I really have to struggle with is how often to update ATM.

     

    HardToLove
    25 Jan 2012, 07:55 AM Reply Like
  • LT
    , contributor
    Comments (5783) | Send Message
     
    thanks...great work HTL
    25 Jan 2012, 04:25 AM Reply Like
  • dogday1
    , contributor
    Comments (56) | Send Message
     
    HTL.
    Great analysis with easy to read charts . I particularly like the L plates in right hand corner just for us learners, or are they for lurkers.
    25 Jan 2012, 04:39 AM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    HTL,
    Could you give me some hints as to what I should be looking for in the charts you provided?
    Apologies if the below is redundant or obvious, but are my layman's observation:

     

    What struck me about yesterday's volatility was how price decreased from .59 to .53 in about 3 minutes from about 3:48 to 3:51. Then, price reverted to .59 after hours. My level II data shows that there were also lots of 2,500 share blocks traded at about the turnaround from .59. Another odd thing, which others have noted, is the almost daily transaction of 100,000 after 2 p.m.

     

    Thanks,
    jll
    25 Jan 2012, 06:24 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » JLL: One thing I had noticed in the first charts was that the lows, IIRC, tended to lead other indicators, and especially the short percentage. I also noticed that at or near the peak of short percentage the high-low range converged big time. I didn't get much beyond that yet as I was focused on "Git 'er done".

     

    As to the 100K, only three or four times recently, IIRC. If it's important I can review my snapshots back through November - let me know. Anyway, NASDAQ has set aside several periods during the day (roughly, IIRC, open, close and every two hours?) for "cross trades" which are for negotiated deals that bypass normal market maker processes. Not all large ones that happen in those times are cross trades, I guess, but likely a very high percentage are.

     

    The pullback was noted in my comment last night and by Occamsrazor (and others?) before that. It does fit it with my comment about buying pressure abating, the *possible* market-maker trying to catch up, ... But we'll never *know*.

     

    But if we assess it correctly a high percentage of the time, hopefully leading to a high success rate in predicting "what's next", we're ahead of the game.

     

    The more eyes and brains noting and sharing such observations is a *big* plus, so duplication is not an issue to me.

     

    Thanks for mentioning it here - I would not have thought of posting that here.

     

    HardToLove
    25 Jan 2012, 08:13 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Folks,

     

    I thought of two things, one to be done moving forward and one I'm unsure would be useful.

     

    Moving forward, when I update anything in the article, I'll put a change log entry at the top so that minimal time is needed to decide what to look at (again?). And I'll add a comment down here with a brief summary, causing notification to you by SA if you're following comments.

     

    Looking at data while prepping my comment on last night's Axion concentrator that Mayascribe runs, I thought it might be useful to include short sales volume in the charts' volume segment, side-by-side with total volume. The reason this seems potentially useful is that the unusually high(?) total volume *masked* the significance of the short sales volume yesterday by making the percentage lower.

     

    During *normal* times, percentage seems quite useful alone but during times of large volume swings, I think the actual volume might allow better analysis.

     

    I'd like thoughts on this.

     

    Thanks to everyone who finds this useful and takes the time, as available, to contribute to all of us (hopefully) doing better.

     

    HardToLove
    25 Jan 2012, 08:24 AM Reply Like
  • Tickerman
    , contributor
    Comments (101) | Send Message
     
    WIth good work like this you may be pressured to change your name!

     

    Thanks
    25 Jan 2012, 08:35 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » LoL! I'd have to see a change in my wife's apparent perception of me first. That was the genesis of my handle! :-))

     

    Thank you for the compliment!

     

    HardToLove
    25 Jan 2012, 09:06 AM Reply Like
  • bangwhiz
    , contributor
    Comments (2240) | Send Message
     
    Good Stuff HTL. I want to contribute but as for now I am more interested in your conclusions going forward than spouting off my half-baked opinion. I'll be watching your work closely. It is very interesting to me. Sometimes you just need to keep collecting data and attempting to interpret it when suddenly "bingo" - it hits you right in the face.
    25 Jan 2012, 09:31 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » BW, "smack in the face" is what I will expect after enough "sweat equity". Let's hope it's not the share price that does it to me! =>8-O.

     

    HardToLove
    25 Jan 2012, 10:12 AM Reply Like
  • Deamiter
    , contributor
    Comments (165) | Send Message
     
    I wonder what (if any) effect public presentation of this data might have on MM actions.
    25 Jan 2012, 09:39 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Deamiter: It would surprise me if they would ever have any awareness of something from us small fry.

     

    Remember that the article I posted in the concentrator stressed that the MMs have no awareness of the fundamentals of stocks with which they work. If they don't know even the *basics* of the company, I can't see them becoming aware of this little nook.

     

    What I *can* see from this effort, if we're lucky, is more apparent "strong hands". As folks understand what is happening (correctly we all hope), they'll be less likely to get spooked.

     

    After all, if one knows what will likely happen and possible causes, one is more comfortable with riding out the waves when the more-or-less expected happens. When the expected occurs, we're all more "comfy".

     

    In this case, to paraphrase, "familiarity breeds contentment".

     

    MHO,
    HardToLove
    25 Jan 2012, 10:18 AM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    MM bid now .57 ask .61. Much tighter than yesterday. When they tightened spread yesterday, isn't that when market moved down, or at least began intervening toward putting it toward direction they liked?
    25 Jan 2012, 09:53 AM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    so is the 9:39:24 transaction of 175 shares at .595 coupled with the .61 bid, an attempt to move market higher in order to sell more shares in a little while?

     

    HTL,
    Sorry if this isn't dialogue you are looking for, but find it interesting the short term actions in order to try to understand longer term.
    25 Jan 2012, 10:03 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » IIRC, yes. By tightening spread they force those anxious to trade to move their bids and asks to "get ahead of the line". And those that have bids/asks out of the range are effectively locked out. Another benefit is to potentially reduce volume. Without volume, the MMs needn't worry about price running away from them, in quantity or magnitude.

     

    MHO,
    HardToLove
    25 Jan 2012, 10:25 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » JLL: We can never *know* the answer to that question. My *hunch* is no because from other stocks I watch the common MM action is for trades of multiples of 100, usually 100, 200, ... small and "pecking the bid" as I call it.

     

    This let's them eventually exhaust the best bid with fewer shares (lowering risk and not digging the hole they are in much deeper) and immediately pop in, maybe, some trades that take out the next one or two prices lower on the bid, often with a sudden volume spike. But that particular stock habitually runs 2M or more shares a day.

     

    It may be more difficult with the lower volume and high percentage of shares in strong hands in (AXPW).

     

    So I think that trade was likely a retail buyer building a position. The market maker may have shorted it, of course, if he feels he'll be able to cover later at a lower price, either because a sell order came in (shares backing it will come in) or he sees the market heading lower somewhere down the road by hook or by crook.

     

    HardToLove
    25 Jan 2012, 10:40 AM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    now .56 bid and 57.5 ask. So is this the Squeeze? In my quick attempt at education in this area, I'm speculating that prices are supposed to decrease now.
    25 Jan 2012, 11:07 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Well, we hit $0.5999 today, so they've already reduced.

     

    We can only get a squeeze when the buying pressure from investors and traders overwhelm the MM. Today's volume doesn't suggest that.

     

    Decreasing? If the market-maker has been able to keep/get his average short price to near the current trade, he should be trying to test the strength of the buy side (hitting the bids or mid-point with small offers just below the ask?) to see if weakness in demand at those prices appears and there's small volume underlying the bid(s).

     

    I don''t know how much information they have beyond what we can see and their own portfolio, but I assume they have some additional sight into the market.

     

    When they see weak support on the bid side and potential willingness to move on the sell side, that's when I would expect to see small trades pecking the bids to exhaust them or even a single large trade taking out at least the total current best bid. This would be an effort to spook sellers into dropping price so the MM can buy those shares to cover (some of?) their short position

     

    Don't get too much "tunnel vision" on this MM stuff - there are real (smaller?) investors also in the market. We can't take an individual action as indicative of what we re looking for ("confirmation bias" at play).

     

    It's the patterns, over time, that will be the "clues we can use".

     

    At 11:52, buy:sell is 6:6:1 (up from ~4:1 around 10:51), indicative of good buying pressure from either real investors or the MM trying to stay in range with small covering buys and/or more short sales to adjust his average price. Volume ~209K, not what I would expect if the MM is in panic mode.

     

    Largest trade was 33K at $0.58 the 10:51 time, after a morning during which prices were $0.57-$0.59 range. If MM was shorting into those morning trades, a $0.58 covering buy might yield a small gain ($ short position improvement?).

     

    But again, avoid tunnel vision - there are other folks in the market besides the MM.

     

    All MHO,
    HardToLove
    25 Jan 2012, 12:22 PM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    now we've moved off the high and there is another transaction for
    $0.5750 160 10:51:05
    lower again?? I know you don't think this is MM, HTL
    25 Jan 2012, 11:28 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » We really can't know. It's the trends that I think offer the clues.

     

    My reply above encapsulates the possibilities I see ATM.

     

    Keep in mind that high broke above the falling 200 day SMA yesterday, but closed below it. Traders and investors would view this rejection (failure to close above) as at least *potential* lack of demonstrating bullishness and maybe even weakness. Falling volume as we trade above it ($0.5798) suggests uncertainty that price can continue up.

     

    This would give hope to any MM severely out of position.

     

    But he's got to be cautious as, volume notwithstanding, we're still getting higher highs and lows. If this pattern can be broken and combined with a close below the 200 day SMA with volume starting to increase (suggesting some profit-takers are ready to ride), the MM should saddle up as he'll have his opportunity coming into view.

     

    MHO and with lots of ignorance still in place,
    HardToLove
    25 Jan 2012, 12:42 PM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    bid ask now .54 and and .65. Would this mean that MM is at neutral position?? Sorry, just trying to see if I am understanding this. Won't ask for so many responses in future.
    25 Jan 2012, 12:22 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » JLL: I took a look at a snapshot. Your post time was 12:22 1/25.

     

    At that time my ADVFN snapshot shows bid/ask running ~40/58/~$0.59 at the extremes (12:01-13:09).

     

    Double checking on Power Etrade Time and Sales panel, about the same.

     

    I think you got some bad data there if you saw $0.65.

     

    Of course, I could have bad data - but two sources seem to confirm.

     

    HardToLove
    25 Jan 2012, 01:56 PM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    I checked that several times as it (.65) stayed at the same price for some time. As it is a free service, probably not the best and as it seems to be inaccurate, will refrain from making comments about the spread. thanks.
    25 Jan 2012, 03:52 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » *HEADS UP*!

     

    Just a reminder - this is about finding trends that may help us. A PM reminded me that it's easy to get wrapped up in thinjking that the market-maker(s) are always manipulating and/or always in an untenable position and being forced to play games.

     

    My feeling is that the vast majority of the time this is *not* the situation. Most of the time the MM is responding to buy/sell orders. The daily short sales offer us a peak into the (potential) selling pressure above what we can normally see and also allow us to project that shares backing the shorts will be appearing to be either netted out by the DTCC or released into the market (if the MM covered most/all of those short positions).

     

    So, don't be looking for every little wiggle to be manipulation or indication of a "squeeze".

     

    Just let the trends speak to us without our biases interfering.

     

    MHO,
    HardToLove
    25 Jan 2012, 01:12 PM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    HTL,
    Thanks for your expertise. Will look at bigger picture.
    25 Jan 2012, 01:36 PM Reply Like
  • D-inv
    , contributor
    Comments (4777) | Send Message
     
    Very nice and interesting, HTL. Given the starting set up you have put together, it occurs that address of another factor might be helpful? Is data on numbers of market makers available? I rather suspect that trading volume and number of market makers is highly correlated. And the fewer the market makers the easier for those players to coordinate influence. Relative size of market maker AXPW "books" could also matter.

     

    FWIW
    25 Jan 2012, 06:42 PM Reply Like
  • jlyleluce
    , contributor
    Comments (247) | Send Message
     
    I did search yesterday for number of MM's for Axion and only came up with the one.
    25 Jan 2012, 06:49 PM Reply Like
  • D-inv
    , contributor
    Comments (4777) | Send Message
     
    > jll ... "the one"? Commentary on Maya's Concentrator blogs by HTL, Mercy, wtblanchard, etc. regarding "Level 2" views and changes in broker used by Fidelity to execute trades have led me to infer there were several AXPW market makers.
    25 Jan 2012, 07:02 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » D-inv & JLL: There's lots of MMs, apparently, based on what we see on Level 2. But I guess, based on the two exchanges shown for the trades (only codes V show bid and ask and only code U shows trades on Time and Sales) that the OTC/BB market is hosted only on the NASDAQ facility and all electronic action goes to that facility. But that's an "exchange" or "market" - not sure which is the correct terminology. I use exchange so far.

     

    The Level two on my platform show "MMID" where w see things such as "AUTO", "BTIG", NITE", ... so that suggests these are market-makers.

     

    They are not available via my current resources. In the future when I start working with the full transaction tapes, I'll likely see a full list of single-digit codes as part of FINRA's specification (I've seen one in learning about the daily short sales but it was out of date then and I've not gone back to see if they've updated it.

     

    I just did a grep (a global search) for any FINRA records in the files that report AXPW short sales that does *not* have the standard market code of "O". All records had this code. So that seems to support my thoughts for now.

     

    Beyond that, in my current chart formats I don't think we could find a way to summarize the number of market makers since they come and go at-will throughout the day, probably in response to whether or not some customer has orders in or not. Figuring what's meaningful - lots in the A.M, P.M. all-day only, more here, less there, ... - would probably leave us frustrated.

     

    Real time where we can watch them come and go seems useful, but I sure wouldn't want to figure out how to make that meaningful on an EOD-type chart unless we all figured out some arbitrary scheme that we could be sure wouldn't be just adding "noise".

     

    MHO,
    HardToLove
    25 Jan 2012, 07:19 PM Reply Like
  • D-inv
    , contributor
    Comments (4777) | Send Message
     
    I hear you on the difficulty of presentation and interpretation, HTL. Perhaps a simple count of MM and a ratio of MM active in a day to total MM in the stock. Here though, I suspect the only way to get a proxy for total count of MM for AXPW is through Axion and would require daily scrutiny of shareholder records for registered broker-dealers holding shares in "street name" for benefit of clients. That may not work either since outfits like Fidelity might appear as shareholder of record but not act as MM in the stock.

     

    Interesting, interesting issues here that all argue for positive net benefits to shareholders from listing on an organized exchange - NASDAQ, AMEX, NYSE.
    25 Jan 2012, 07:59 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » D-inv: "... would require daily scrutiny of shareholder records for registered broker-dealers holding..."

     

    I'm not aware (never gone looking for it) of a source for that. Is that available *daily* when registered on a major? I've never had occasion to determine that yet either.

     

    Ah, the shortcomings of me still being so early on the learning curve.

     

    HardToLove
    25 Jan 2012, 08:30 PM Reply Like
  • D-inv
    , contributor
    Comments (4777) | Send Message
     
    HTL, I was just "thinking out loud" about potential analytical approaches, information requirements, and possible info sources.

     

    I would be astounded to learn daily or even weekly data on corporate ownership is readily available from any source. I am far from being the most knowledgeable person around on corporate ownership records, but the understanding I do have leads me to think the only source with the information necessary to compile it is Axion Power's transfer agent or the corporation itself. And, people usually do not spend resources to compile information without a perceived need to know or benefit therefrom.
    25 Jan 2012, 09:10 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » "And, people usually do not spend resources to compile information without a perceived need to know or benefit therefrom".

     

    So are you thinking that what *we* might want it for would not meet that criteria?

     

    If if we could get it, do you perceive a lot of added value if added to what we know already? I'm trying to think in terms of how buyers come and go, sellers come and go, both change brokers off and on, ...

     

    I'm open - just want to make sure we don't spin our wheels trying to get it, maybe failing, and then even if we do get it ... is it timely enough and how would we apply it?

     

    But keep thinking - we're like R & D, every idea may be "The One"! But many won't be. I'm not negative on the thought, I'm trying to vet (triage) as cheaply as possible, in terms of time and effort.

     

    HardToLove
    26 Jan 2012, 02:56 PM Reply Like
  • D-inv
    , contributor
    Comments (4777) | Send Message
     
    HTL > "So are you thinking that what *we* might want it for would not meet that criteria?"

     

    :-) I'm thinking that transfer agents have no incentive to compile or keep track unless the corporations they work for want the data enough to pay for the service. In some instances, I suppose I can visualize a corporation having that level of interest, but many would not. So, I just don't think it likely that reliable data representative of OTC stocks exists. We could spin a lot of wheels for naught.

     

    OTOH, I noticed something today of possible interest (and use as a proxy for market breadth) when I accessed the SA quote page for AXPW.OB. The page generated by SA presented in the upper right hand corner a count for "real-time alert" subscribers for that stock. The same applies for other stocks, including Dow and S&P 500 shares. Earlier today the count for AXPW.OB was 207 while it was 208 just a moment ago. Some other subscriber counts include

     

    DD - 2,067
    HON - 937
    MAKO - 404
    ISRG - 951
    MXWL - 100
    XIDE - 248
    ZBB - 77

     

    I'll play with those data (and more) for a bit going forward.
    26 Jan 2012, 04:35 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » D-inv: That *sounds* like it might be a great indicator. Nothing like a "hard count" to gauge investor interest. ... Wait - might be traders.

     

    Regardless, if it presents a trend and then there's a substantial change in trend - acceleration, deceleration or reversal - it would appear to be a low-effort reliable indicator of interest. Even "no change" may be quite useful, suggesting a continuing level of interest.

     

    HardToLove
    26 Jan 2012, 04:42 PM Reply Like
  • Tampa Ted
    , contributor
    Comments (2652) | Send Message
     
    HTL - Fascinating stuff. In 2007/2008, I spent a considerable amount of time researching the best way to bring a class action suit or private RICO action against entities that allowed naked short selling. As a matter of course, I delved quite deeply into the machinations at the DTCC and broker/dealer level that allowed a non-market maker naked short to occur.

     

    After I finish the project I am working on, I would like to come back and analyze your technical observations and if possible engage in the discussion.

     

    Thanks for sharing!
    26 Jan 2012, 02:09 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Stefan,

     

    Glad to hear what you're doing. I've had trouble, in exactly some of the areas you touch on, DTCC and market-maker handling of covering shorts operations. Best *guess* I've had thus far is that the DTCC *could* net a MM short position as shares backing the sell orders are placed into the market-maker (owning broker?) control. But I *think* the market-maker could also make covering buys as his naked short sales may drive pps in the market to an attractive level.

     

    But I don't know how this is most frequently handled. Or even what's allowed in this regard.

     

    In the latter case, I would expect the MM to release the newly received shares into the market and make more profit (probably since his net cost should be the ((paid price less short sale price) plus cover price). Short sale price could have occurred at an equal or higher price if care was exercised during the short sales.

     

    Along with whatever daily short sales files (I *think* I've got all available - never sure), I've also got a fair amount of the fail-to-deliver reports. I'm trying to position now so I can start handling the monthly (delayed a month of course) transaction tapes to see if there's any good stuff there.

     

    Anyway, I'd love to discuss anything at all. If there's anything that must be kept private, just use SA private message to send me your e-mail or Skype name or ...

     

    HardToLove
    26 Jan 2012, 02:46 PM Reply Like
  • Tampa Ted
    , contributor
    Comments (2652) | Send Message
     
    Give me a week to get my head back above water and I will take some time to go over your data and the above comments in depth to see if I can add anything or just add to the confusion of the black box that is known as the DTCC ...
    26 Jan 2012, 03:02 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Thanks! No rush from my POV - this will be a long slow slog for me.

     

    HardToLove
    26 Jan 2012, 03:08 PM Reply Like
  • Futurist
    , contributor
    Comments (2109) | Send Message
     
    HTL,
    Just wanted you to know that I admire your persistence to understand the MM world and its effect on shorting. My thought is that it is irrelevant in most cases but I admire your persistence.
    Hope you uncover some fabulous treasure on your hunt.
    26 Jan 2012, 09:36 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19390) | Send Message
     
    Author’s reply » Thanks!

     

    For long-term investment, it is certainly going to be irrelevant. But since I also want to trade some small blocks, I'm hoping that it will add to what I've learned so far.

     

    I'm also hopeful that it may allow me to add to my core at better prices than what I might achieve otherwise. A penny here, a penny there does add up.

     

    Right now I'm particularly pleased with my double up at $0.30. Would've been even better at $0.25, of course. But in the long run that will not really matter to me.

     

    If it turns out this doesn't yield any nuggets, at least I've learned a lot (including that this particular stuff is *not* useful even for trading) and that is good to know too.

     

    HardToLove
    26 Jan 2012, 10:53 PM Reply Like
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