I have heard people telling in TVs there were lots of shots in the stocks which has been taken off, How people get to the no of shorts in stocks.I there a way i identify the inceease of decrease of shorts in a stock
If you are talking about equities, there is no real way to identify the number of shorts alone.
But you can have a look at the TotalSellQty which is queued in the limit order book Versus the TotalBuyQty in the limit order book. If you are consistently monitoring these values and TotalSellQty seems to be always many times than TotalBuyQty, this means many peopleare interested in shorting.
In F&O you can have a look at the open interest along with price trend to see whether people are shorting. But here too we cannot get exact numbers.
This is based on my observation. Wait for seniors to reply.
I think sometimes what happens on the TV is a joke.
Firstly in futures and options, for every long there has to be a short, and vice versa. So if someone says there are more longs than shorts, it is basically a joke.
The only thing you can conclude though is say that when markets are going up and open interest is going down (total open contracts), it is probably a safe thing to assume that people who had shorted are in pain and buying back. So you might just call that as short covering, but note that when there are shorts covering and OI is going down, that means the longs are also covering. So you could also call this as profit booking by the longs. ;)… …
1 Like
Whatever the analyst comment on TV should be taken as the overall market sentiment for the underlying that he/she is referring to.
w.r.t to Stocks, at the end of day you can verify their claims by looking at the delivery position of that particular underlying.
w.r.t to Derivatives, compare the OI change of the underlying with price change over a period of time.
a link to a similar query http://tradingqna.com/4500/how-data-and-volume-data-interprete-things-for-buying-selling
I don’t think TotalSellQty is an indication that people are willing to short. These people can also be people who have already having the stocks with them and waiting to sell for higher price. Also in F&O, when open interest increases, there are equal number of buyers and sellers increasing.
Yeah I agree. I just was trying to say, that since many people are willing to sell, there is a probability that price would go down.
But as you said, we cannot account them as shoters since they are a mix of shorters and square-offers.
1 Like