Why is it SMH shows 4.9M shares outstanding, and yet the short interest shows 11.4M shares short? SOXX shows 3.8M outstanding and 3.7M short? What am I missing here? I think these indexes are due for a pullback, but I don't want to buy puts into something I don't understand.
Looks like 7.8mm outstanding. https://www.vaneck.com/smh/?gclid=CJ3sk-f3ts8CFYlkhgodPSkMSg Where are you viewing the short interest?
Thanks for that link Bob. Short Squeeze.com is showing 23.281M shares short. How does that work? http://shortsqueeze.com/?symbol=smh&submit=Short+Quote™
I have no idea how that many shares can fail to deliver, unless it has to do with the etf redemption/creation process. I'll ask.
I spoke to an ETF expert. He told me an equity MM does not need a locate on a hard to borrow. they can short the ETF in size and hedge with buying the basket of stocks.They have 6 days to submit the basket for creation. Is is one possible explanation. Let's see in a week what the share count is.
Interesting. I wonder what would happen if there was a run on the stock? Probably not a good idea to swim in uncharted waters. But I do think a pullback is in the cards for the semi's. MU reports next week and I think the markets will sell the news, good or bad, sector wide. Thanks Bob.
They buy the basket as they short the ETF, then reverse. They only submit the basket if they can't reverse. They are always fully hedged after a short time.
Since you can always create more units of an ETF the short interest isn't telling you the same thing as it is for a stock. You really need to tally up the outstanding shares of all the companies in the index, multiplied by their weightings, to have an apples to apples comparison of the percent short vs float.
These semi-conductor etf's look like they are ripe for a pullback. Micron reports after the bell tomorrow and I'm sure they'll do stellar. Sell the news.