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Firecracker
08-25-2011, 03:53 PM
Can anyone shed some light on the relationship between outstanding short interest in a stock and that stocks's effective volume reading? Intuitively it seems that there should be some relationship, but this doesn't always seem to be the case.

Cases in point: 2 popular MREITs , AGNC and NLY both show substantial, extended negative trends in their effective volume readings, but their outstanding short interest as reported by Yahoo is quite low.

ernsttanaka
08-25-2011, 04:25 PM
For NLY one answer come to mind.

NLY is issueing new shares on a continues bases. They 'manage' the stock price and try to keep it around $18. Every time it hits $18 a new issue is moved to the market.

Pascal could probably indicate if my guess makes any sense.

Ernst

BTW Heavy invested in NLY, so very interested in a conclusive answer.

Firecracker
08-25-2011, 05:40 PM
For NLY one answer come to mind.

NLY is issueing new shares on a continues bases. They 'manage' the stock price and try to keep it around $18. Every time it hits $18 a new issue is moved to the market.

Pascal could probably indicate if my guess makes any sense.

Ernst

BTW Heavy invested in NLY, so very interested in a conclusive answer.

Thanks for replying. That is interesting about NLY. Maybe those new shares hitting the market are what is driving the effective volume down.