Mar 31, 2016

Posted by in Stock Reports | 0 Comments

How Are The Shorts Trading These NYSE Stocks? – American Express Company (AXP), Pandora Media, Inc. (P), Energy Transfer Equity, L.P. (ETE)

How Are The Shorts Trading These NYSE Stocks? – American Express Company (AXP), Pandora Media, Inc. (P), Energy Transfer Equity, L.P. (ETE)

When an investor sells a stock short, they are betting the price will fall. They will borrow the shares from a trader, sell them at the current price, and then repurchases them in the future to hand back to the trader. When the shares have been returned, the contract is covered and closed out. The difference in the sale price and repurchase price goes into the investor’s pocket as profit. With any stock, an analyst can know how many shares have been sold on margin, and this indicates how many investors must repurchase the stock in the future to settle the short sale transaction. This percentage of shares outstanding that has not been repurchased is the short interest of the stock.

Depending on stock’s trading history, 10 percent may be a high amount of short interest. In this case, an investor will know there is a relatively large amount of shares that must be repurchased in the near future in order to cover short sale contracts. As a result, stock’s price may be temporarily inflated when these investors repurchase shares to cover. It would be a bad time for an individual to start a new short sale contract on the stock. However, it may be an excellent time for an investor to purchase shares of the stock outright or to purchase a contract for difference on the stock with a short maturation. Both of these could turn out to be highly profitable in the short term, given the stock’s current high short interest.

When a security is experiencing a period of low short interest, it can indicate investor sentiment about the security is actually quite high. Very few investors believe the security’s price will fall. For example, if a stock has only 2 percent short interest when compared to the earlier 10 percent, an investor knows short sale tactics have dropped substantially. Most people holding shares in the security are doing so in order to profit off the company’s growth. If an investor believes the security will take a turn for the worst, this would be a good opportunity to sell short.

As of 15/03/2016 short interest for American Express Company (AXP) stood at 19128303 shares, an increase of 2402766 shares or 12.56 percent compared to 16725537 shares on 01/03/2016. This short interest comprises 2 percent of the entire float. Short interest ratio now stands at 2.71 at the average volume of 7049258 shares.

According to the latest short-interest data for the two-week period ended 15/03/2016 short interest for the stock of Pandora Media, Inc. (P) decreased from 35357950 shares at the end of the settlement date of 01/03/2016 to 33851409 shares, marking a decline of -1506541 shares or -4.45 percent. The current short interest accounts for 15.2 percent of the company’s total outstanding common shares and the days-to-cover short interest ratio, on the other hand, is 4.98962 as of 15/03/2016 assuming average daily trading volume of 6784366 shares.

Short interest for the shares of Energy Transfer Equity, L.P. (ETE) rose 25.2 percent from 60002307 shares on 01/03/2016 to 80215275 shares on 15/03/2016. Investors have taken short positions on 11 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 3.741752 days. It is based on average daily trading volume of 21437894 shares.

 

Comments are closed.