Mar 16, 2016

Posted by in Stock Reports | 0 Comments

3 Large-Cap Short Selling Trends You May Have Missed: Alliance Data Systems Corporation (ADS), PPG Industries, Inc. (PPG), Vulcan Materials Company (VMC)

3 Large-Cap Short Selling Trends You May Have Missed: Alliance Data Systems Corporation (ADS), PPG Industries, Inc. (PPG), Vulcan Materials Company (VMC)

Short selling is one way to give a person the ability to profit from a falling stock. It is the selling of a security that the seller doesn’t own. One borrows a stock (or futures contract or option), then sells it, hoping to replace those borrowed shares by buying them back at a lower price and thus earning a profit.

If the security goes up from the price at which you initially sold, your loss is the difference, and it can be unlimited.  That’s the risky part of short-selling – your potential profit is limited while your risk is unlimited (if you are un-hedged).

Short interest is the total number of shares of a stock that have been sold short but not yet covered.

A large increase or decrease in short interest can be a good indicator of sentiment.  A high (or rising) short interest means that a large amount of people believe that a stock will go down, similar to the short futures contracts from the Commitments of Traders data and high put/call ratios.

The short-interest ratio is the total number of shares sold short (short interest) divided by average daily volume. This is also called days to cover because it shows – given the security’s average trading volume – how many days it will take to cover all of the short positions. The higher the ratio, the longer it would take to buy back the borrowed shares, and the potentially more bullish it is.  It is potentially bullish because if some positive catalyst occurs, then there may be heavy buying demand from those short looking to cover (buy back) their shares.

As of 01/03/2016 short interest for Alliance Data Systems Corporation (ADS) stood at 2403105 shares, an increase of 235288 shares or 9.79 percent compared to 2167817 shares on 12/02/2016. This short interest comprises 4 percent of the entire float. Short interest ratio now stands at 2.99 at the average volume of 803902 shares.

According to the latest short-interest data for the two-week period ended 01/03/2016 short interest for the stock of PPG Industries, Inc. (PPG) decreased from 2811534 shares at the end of the settlement date of 12/02/2016 to 2072856 shares, marking a decline of -738678 shares or -35.64 percent. The current short interest accounts for 0.78 percent of the company’s total outstanding common shares and the days-to-cover short interest ratio, on the other hand, is 1.586971 as of 01/03/2016 assuming average daily trading volume of 1306171 shares.

Short interest for the shares of Vulcan Materials Company (VMC) rose 6.81 percent from 3006136 shares on 12/02/2016 to 3225804 shares on 01/03/2016. Investors have taken short positions on 2 percent of the total common shares of the stock that are floating on the exchange. The days-to-cover short interest ratio is now at 3.1392 days. It is based on average daily trading volume of 1027588 shares.

 

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