Determine the short interest

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Reference no: EM133143941

1. Short Interest

A high degree of short positions for a stock indicates a greater bearish prospect for a firm. There are two common measures for the short position of stocks: "% of float shorted" and "short interest ratio" also called "days to cover".

Recent news about Peloton being a good candidate for short squeeze prompted me to search for Peloton's short position here

https://www.marketwatch.com/investing/stock/pton?mod=mw_quote_switch

Read through the "OVERVIEW" section on the middle of the page and answer the following questions:

a. You notice that the amount of shares outstanding is different from the public float. Search online for the definition and calculation of the float of a stock, and how is it different from the number of shares outstanding?

b. What is Peloton's "% of float shorted"? Please show the calculation detail. (% of float shorted = short interest / public float)

c. What is Peloton's "short interest ratio" or "days to cover" ? (Short interest ratio = short interest / average daily volume)

d. Switch your search to another company on the same webpage. What is the "% of float shorted" and "short interest ratio" for the company? Compared with Peloton, which one has a more bearish outlook?

2. Payment For Order Flow (PFOF)

Watch the video

https://www.youtube.com/watch?v=qYfHxYDLTjk&ab_channel=LawOfficesofRyanReiffert,

and answer the following questions:

a. What is brokers' duty of best execution? What are 4 options that brokers have for routing orders mentioned by the speaker?

b. What is Payment for Order Flow? Why do market makers willingly make this payment?

c. Why are the duty of best execution and PFOF at odds with each other? Search online to find out what percentage of Robinhood's revenue comes from PFOF?

Reference no: EM133143941

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