XLF- Financial Select Sector SPDR second most-heavily shorted security on the AMEX

Quote from Sparohok:

Get a clue, guys, you can't have a short squeeze in an ETF, only in the underlying. A while ago TLT had short interest that was 150% of float, and nobody got squeezed. Even 150% of TLT's assets is miniscule compared to the Treasuries market, far less than one days worth of transaction volume. When shorts need to cover, market makers take over the short position, hedge it out against the underlying, and then at the end of the day the fund issues them creation units to flatten their books. As long as the transaction volume from the market makers hedging activities don't impact the underlying market(s) there will be no squeeze.

Same story with XLF. Their total assets represent just a bit more than 0.1% of the market cap of the financial sector. Any squeeze will be in the underlying. Since C, BAC, AIG, and the like have short % of float in single digits, no squeeze.

Martin
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Good point...

the real question... what's the short interest of of the underlying. I tend to agree that the financials will outperform the SPX over the next couple of days, but I'm not about to buy.
 
Quote from Sparohok:

Get a clue, guys, you can't have a short squeeze in an ETF, only in the underlying. A while ago TLT had short interest that was 150% of float, and nobody got squeezed. Even 150% of TLT's assets is miniscule compared to the Treasuries market, far less than one days worth of transaction volume. When shorts need to cover, market makers take over the short position, hedge it out against the underlying, and then at the end of the day the fund issues them creation units to flatten their books. As long as the transaction volume from the market makers hedging activities don't impact the underlying market(s) there will be no squeeze.

Same story with XLF. Their total assets represent just a bit more than 0.1% of the market cap of the financial sector. Any squeeze will be in the underlying. Since C, BAC, AIG, and the like have short % of float in single digits, no squeeze.

Martin
More...
Do you think we that stupid? :) Looking at the table I see that people are saying that GS is bluffing.

Code: 
Name                  Symbol  Weight   Short Interes
CITIGROUP INC         C       8.82%    0.6%
BK OF AMERICA CP      BAC     8.55%    0.8%
AMER INTL GROUP INC   AIG     6.51%    0.9%
JP MORGAN CHASE CO    JPM     5.78%    0.9%
WELLS FARGO & CO NEW  WFC     4.63%    1.2%
WACHOVIA CP           WB      3.56%    1.4%
GOLDMAN SACHS GRP     GS      2.73%    3.1%
AMER EXPRESS INC      AXP     2.65%    1.8%
MORGAN STANLEY        MS      2.50%    1.2%
ML CO CMN STK         MER     2.43%    2.2%
 
Quote from Sparohok:

Get a clue, guys, you can't have a short squeeze in an ETF, only in the underlying. A while ago TLT had short interest that was 150% of float, and nobody got squeezed. Even 150% of TLT's assets is miniscule compared to the Treasuries market, far less than one days worth of transaction volume. When shorts need to cover, market makers take over the short position, hedge it out against the underlying, and then at the end of the day the fund issues them creation units to flatten their books. As long as the transaction volume from the market makers hedging activities don't impact the underlying market(s) there will be no squeeze.

Same story with XLF. Their total assets represent just a bit more than 0.1% of the market cap of the financial sector. Any squeeze will be in the underlying. Since C, BAC, AIG, and the like have short % of float in single digits, no squeeze.

Martin
More...


agree, its an etf.


sold xlf at 30.75, watched it run to 31+

will buy back under $30.
 
Quote from TorontoTrader2:

In the old days it would have been QQQ.

I'm guessing #1 is some other broad market ETF, mabe related to Russel index I dunno.
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I think the q"s will rally before friday and leave all the puts worthless, support down there around 48.00 47.86,
 
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