Hard to explain such a huge drop in shorts given the low volume....

Hard to explain such a huge drop in shorts given the low volume. The data on ShortMan definitely matches the ASIC data so unless they’re wrong it’s not a mistake! If I had to hazard a guess I’d put it down to T+2 settlement (shorts closing out on Thursday on much larger volume with the purchases not settling until Monday).

Either way, looking at this from a purely psychological standpoint (leaving fundamentals and valuation aside) you’d have to find this worrying as a shorter, seeing the total shorts fall by 17.5% in a single day.

It suggests a major short, or group of shorts have closed out seeing no more downside ahead, or more likely the potential for a surge following the upcoming US launch in May. Based on the low short selling since Monday it wouldn’t surprise me the total short % falls even further next week (remembering that it’s published 4 days behind).

Such a sudden drop is likely to do two things. Firstly, buyers who may have been sitting on the sidelines potentially put-off by the growing shorts will move in with renewed confidence. Secondly, those who are still short will be further inclined to cover themselves, before any squeeze takes place, both of which would see the price strengthen.

Very keen to see how the figure moves next week. Anyway, just my thoughts. As always do your own research. And have a great weekend!