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NVIDIA Corporation Message Board

  • getanid61 getanid61 Apr 10, 2013 4:33 PM Flag

    NVIDIA Becomes #39 Most Shorted Nasdaq 100 Component

    The most recent short interest data has been released by the NASDAQ for the 03/28/2013 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the Nasdaq 100 by “days to cover.” There are a number of ways to look at short data, for example the total number of shares short; but one metric that we find particularly useful is the “days to cover” metric because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then compared to the average daily volume, in order to calculate the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.

    In our new rank based on the most recent short interest data from NASDAQ, NVIDIA Corp (NASD: NVDA) has taken over the position of #39 most shorted Nasdaq 100 component, from Comcast Corp (NASD: CMCSA) which is now in the #54 spot.

    The “days to cover” at 03/28/2013 was 3.42 for NVDA, and 2.40 for CMCSA; this compares to the average across all Nasdaq 100 components of 4.15 (up from the average back on the 03/15/2013 settlement date of 3.66). The chart below shows the movement over time of the “days to cover” values of both NVDA and CMCSA, versus the average Nasdaq 100 component.

    A stock with a high “days to cover” value compared to its peers would be considered to have a higher level of short interest as compared to those peers. This could mean short sellers are using the stock to hedge a long bet elsewhere, or could also mean that short sellers believe the price of the stock will decline. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. So investors tend to keep an eye on that “days to cover” number is high, it is more difficult to close those positions without sending the stock higher until the higher price produces enough sellers to generate the necessary volume.

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