It should not be overlooked that in order to sell shares of a security short, one must borrow the shares on margin, whereby adding to the outstanding margin debt; however, as of today we are well within the range of "normal" levels of short interest.
I am not advocating that the retail investor get approved to trade on margin and begin doing so with abandon. I am simply pointing out that this indicator may not be particularly useful without proper context. Keep in mind that the media's job is to find big numbers and make them look bigger, scarier or more exciting. But there is usually more to the story than the headline.
-- Written by Adam B. Scott, founder of Argyle Capital Partners, in Los Angeles.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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