Mighty u/Gloomy-Huckleberry-6 authors the below:
The short percentage lately has been ASTRONOMICALLY high. I mean, you see numbers like 76%, 80%, 86%….. but math is strange. 89% isn’t just a “little” bit higher than 80%, when it comes to this kind of calculation. It is A LOT higher.
Let’s look at some percentages.
For the past week, it has been over 70% EVERY DAY! But what does that look like in reality? How can you quantify that in a way that the average smooth brain can understand? I’ve built a handy-dandy little chart to help conceptualize how this mess gets logarithmically bigger, the closer that number gets to 100%.
Starting at the bottom of this chart, if 1 share is sold Long, and 1 OTHER share is sold short, then the Total is 2 shares sold. That is, a 50% Short %. Make sense?
So, then, if 1 share is sold long, but TWO shares are sold short, it jumps to 67% Short. That’s a big jump! But things slow down in terms of Short % growth very quickly, and it takes a ton more shares to move the percentage up the chain. To get to 80%, you would need 4 shares sold Short for every 1 share sold long.
And finally… to get to 90% Short, you would need 9 shares sold Short for every 1 long. After that, things just get ridiculous, as it rapidly skyrockets to 32 shares for every 1 share sold long to reach 97%
If we look at the percentages PER EXCHANGE, then these numbers become even more obvious:
So, on the 9th (today), CBOE BYX sold 87.25% of all GME shares as Shorts. Let’s check the handy-dandy chart to help us conceptualize what that would be… that’s slightly over 6 shares sold short for every ONE share sold long. And the crazy part is that this is a MILD number (by exhchange) for some of these numbers lately. Some of these guys reported 100% short!!! Yes… EVERY DAMN SHARE was a short sale.
Now, percentages also hide a mathematical concept of SCALE. That is, 87% of 100 is … well… 87. But 87% of 100,000 is 87,000. Both numbers appear to be 87%, but the numbers under the hood are far different. So, to give it scale, we need to know 87% of what?
For the same highlighted items in percents, I’ve also highlighted the volumes so that we can see the scale of each of these. The 100% entry was only 2,300 shares (HAH! “ONLY” $50,000). But it’s important to note that some of these are 200,000 and up! CBOE EDGX yesterday had 421,299 shares sold short, which was 80.65% of it’s total GME volume. To put that in perspective, for every 1 share sold long through that one exchange, FOUR others were sold short….. up to 421,000 shares.
421,299 / 4 = 105,324 .. so roughly 421,000 shares were sold short, and only 105,000 shares were sold long at just that one exchange on that one day, just to keep the price moving.
No wonder the price wants to slide downward…. they are FLOODING certain markets (specifically NYSE, which is GME’s home market) at 94%/95%…. that is, for every 1 long, 19 OTHER SHARES are borrowed and sold short!! That’s INSANE to me.
The good news is this:
ALL THESE SHORTS MEAN THAT SOMEONE IS GOING TO HAVE TO BUY BACK THEIR BORROWS AT SOME POINT. They just keep digging this hole deeper.
So I’m going to keep holding. NFA, but hopefully you see why I am so bullish on this stock, still.