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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.
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.
[QUOTE=ernsttanaka;16107]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.[/QUOTE]
Thanks for replying. That is interesting about NLY. Maybe those new shares hitting the market are what is driving the effective volume down.