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Almost all of the short interest on stocks where options trade or
convertible bonds trade is directly related to the hedging activity of the
option or convertible traders. You will always notice when a new short list
gets published the biggest changes are almost always new listings of either
options or converts. In emerging markets where stock cannot be shorted ...
borrowed and lent easily .....it is virtually impossible to create a
derivatives market.
Most dealers today now have a hedge exemption that allows them to short
without an uptick ..... which allows the ready use of short as a hedge.
Dan Harels wrote:
> Other than "It's good if you don't understand options", is there ever an
> advantage to out-right shorting a stock over the equivelent option play?
>
> Do data showing short interest in a stock or index reflect short option
> positions?
>
> If short interest data do not reflect option positions, how should that
> information be viewed?
>
> Thanks,
>
> Dan
>
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