@v587d/capital-generation 2.7.0 → 2.7.2

package/selected-skills/InvestSkill/plugins/us-stock-analysis/skills/short-interest/SKILL.md

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+---
+name: short-interest
+description: Analyze short interest, short squeeze potential, and bearish positioning signals
+---
+
+# Short Interest Analysis
+
+## ⚠️ Data Verification — Do This Before Any Analysis
+
+Before running any analysis, always retrieve the latest market data for the ticker:
+
+1. **Fetch current price** — get the live price, 52-week range, and market cap through the host's own data path. In a host that splits roles, delegate the request with an exact brief (ticker, fields, as-of date) rather than searching from this step. Never assume a price from training data.
+2. **Confirm key figures** — recent earnings, revenue, key ratios (P/E, P/S, etc.) as applicable to this skill.
+3. **State your data source** — fill in the `Data & Sources` header (next section) so the origin, as-of date, retrieval path, and confidence of every figure are explicit at the top of the output.
+4. **Stop on missing data** — if a figure cannot be retrieved through the host's data path, name what is missing and stop; the analysis does not run on remembered values:
+
+> ⚠️ **Data unavailable.** <list the figures this analysis could not retrieve>. Those fields are reported as missing and are not estimated — retrieval is a precondition, not a nicety.
+
+Never substitute a remembered value for a retrieved one. Getting the number is the host data path's job — delegate it; asking the user to paste is the last resort only where the host has no retrieval path at all.
+
+---
+
+## 📋 Data & Sources Header — Open Every Output With It
+
+The first thing in the output is this provenance block, filled in — never left as placeholders. It is the standard documented on the [Data & Accuracy](https://yennanliu.github.io/InvestSkill/data-and-accuracy.html) page and the first thing `result-validator` looks for:
+
+```
+Data & Sources
+  As of:      <date the figures represent, e.g. 2026-06-30>
+  Source:     <primary docs — SEC EDGAR 10-K/10-Q, company IR, FRED, exchange data …>
+  Retrieval:  <delegated retrieval | web/tool retrieval | pasted by user>
+  Confidence: <HIGH | MEDIUM | LOW>
+```
+
+- Memory is not a retrieval path. A figure that was neither retrieved nor supplied by the user is reported as missing, never estimated — and never written into this block as if it had been retrieved.
+- Mixed sources: list each with its own as-of date rather than blending them.
+- Data the user pasted is reported as `pasted by user`; do not upgrade its confidence beyond what the user's own source supports.
+
+---
+
+Comprehensive analysis of short selling activity, squeeze potential, cost-of-borrow dynamics, and bearish positioning signals for US-listed stocks. Combines FINRA short interest data, options market signals, and technical context to assess directional risk.
+
+## Analysis Framework
+
+### 1. Short Interest Overview
+
+Measure the current level and trend of bearish positioning:
+
+**Core Short Interest Metrics**
+- **Short interest (shares)**: Total number of shares sold short and not yet covered or closed
+- **Short float %**: Short shares / Total float (shares available for public trading)
+- **Short interest as % of shares outstanding**: Short shares / Total shares outstanding (includes locked-up insider shares)
+- Float % is the more actionable metric — tighter supply amplifies squeeze dynamics
+
+**Short Float % Thresholds**
+```
+Short Float %     Interpretation
+<2%               Negligible — minimal bearish conviction
+2-5%              Low — modest skepticism or hedging
+5-10%             Moderate — meaningful bearish positioning
+10-20%            Elevated — significant short thesis in market
+20-30%            High — heavy bearish conviction, squeeze potential
+>30%              Extreme — high risk environment (squeeze OR fundamental collapse)
+```
+
+**Days to Cover (Short Interest Ratio)**
+- Formula: Short interest (shares) / Average daily trading volume
+- Represents: how many trading days it would take all shorts to cover at normal volume
+- Also called: Short Interest Ratio (SIR)
+
+```
+DTC Range         Interpretation
+<1 day            Very low — shorts can exit quickly
+1-3 days          Low — manageable exit risk for shorts
+3-5 days          Moderate — some covering friction
+5-10 days         Elevated — meaningful covering difficulty
+>10 days          High — forced covering creates significant price pressure
+>20 days          Extreme — structural squeeze conditions present
+```
+
+**Change in Short Interest Trend**
+- Compare last 4 reporting periods (approximately 2 months)
+- Increasing short interest: bears building positions, growing conviction against stock
+- Decreasing short interest: short covering, thesis deterioration, or squeeze in progress
+- Spike in short interest: new negative catalyst or activist short report
+- Rapid decline in short interest: covering rally in progress, thesis proved wrong
+
+### 2. Short Squeeze Potential Assessment
+
+**Squeeze Score (0-10 Composite)**
+
+Assign points based on the following conditions:
+- Short float > 20%: +3 points (high short interest is the core prerequisite)
+- Days to Cover > 10: +2 points (exit difficulty creates forced buying)
+- Recent positive catalyst (earnings beat, product launch, partnership, FDA approval): +2 points
+- Strong price momentum (price above 50-day moving average): +1 point
+- Limited share supply (small float < 50 million shares): +1 point
+- High borrow rate (annualized cost > 5%): +1 point (shorts paying carrying cost = time pressure)
+
+```
+Squeeze Score     Probability Assessment
+0-2               Low — insufficient conditions for meaningful squeeze
+3-4               Moderate — partial conditions met, monitor for catalysts
+5-6               High — most conditions met, squeeze possible on catalyst
+7-8               Very High — strong squeeze setup, catalyst likely to trigger
+9-10              Extreme — textbook squeeze conditions, high probability event
+```
+
+**Three Requirements for High-Probability Squeeze**
+
+All three must be present simultaneously:
+1. **High short interest**: Float% > 15% AND DTC > 7 days (supply-demand imbalance)
+2. **Catalyst or forced covering trigger**: positive news, options expiration forcing hedging, index inclusion, or institutional accumulation
+3. **Limited downside floor**: fundamental support (valuation floor, asset value) or strong technical support level that prevents shorts from adding
+
+**Historical Squeeze Pattern Reference**
+- GameStop (GME) January 2021: 140% short float + retail coordination + options gamma cascade
+- Volkswagen (VW) October 2008: Porsche cornered supply, DTC extreme, short float near 13% of total shares outstanding
+- Common precursors: borrow rate spikes sharply before price spike, DTC > 10 sustained for weeks, options call OI builds in OTM strikes
+- Key lesson: squeezes are self-reinforcing — covering buying creates price increase which triggers more covering
+
+### 3. Borrow Rate and Cost of Short
+
+**Borrow Rate Tiers**
+```
+Annualized Rate    Classification    Interpretation
+<1%               General Collateral  Easy to borrow — no friction on shorts
+1-5%              Easy to Borrow      Low cost, ample supply available
+5-15%             Hard to Borrow      Elevated cost, supply becoming scarce
+15-30%            Very Hard           Significant carry cost, time pressure on shorts
+>30%              Extreme / Recall    Near impossible to maintain at sustainable cost
+```
+
+**Borrow Rate Impact Analysis**
+- At 20% annualized borrow rate: a short position costs shorts approximately 20 cents per $1 of position per year
+- High borrow rates create urgency to cover — especially if stock trades sideways or up
+- Borrow availability changes: easy to borrow → hard to borrow transition signals supply tightening
+- **Recall risk**: Prime brokers can recall shares on loan with short notice, forcing mandatory covering
+- Borrow rate spike (rapid increase in 1-2 weeks) is a leading indicator of pending squeeze
+
+**Implications of Borrow Dynamics**
+- High borrow cost + high short interest = unstable equilibrium
+- Time works against short sellers in high-borrow-rate environments
+- Tracking borrow rate trend over 30-60 days is more valuable than single-point reading
+
+### 4. Bearish Thesis Evaluation
+
+Understand why short sellers are positioned against the company:
+
+**Common Short Thesis Categories**
+- **Accounting concerns**: Revenue recognition irregularities, off-balance-sheet liabilities, undisclosed related-party transactions (Hindenburg Research, Muddy Waters Research methodologies)
+- **Business model deterioration**: Loss of competitive advantage, customer churn, unit economics breakdown
+- **Competition threats**: New entrant disrupting market, margin compression from rivals
+- **Regulatory or legal risk**: Pending investigations, product liability, antitrust exposure
+- **Valuation excess**: Momentum short — stock priced for perfection with no margin of safety (SPAC shorts, meme stocks)
+- **Structural decline**: Industry secular headwinds, obsolescence risk, debt spiral
+
+**Short Seller Credibility Assessment**
+- Known activist short sellers (Hindenburg, Citron, Muddy Waters, Gotham City): publish detailed reports, track record publicly known
+- Hedge fund shorts (13F disclosures): disclosed quarterly, often fundamental/valuation-based
+- Anonymous internet posts: low credibility, but sometimes contain legitimate leads
+- Evaluate track record: success rate of prior short thesis for identified short seller
+
+**Counterarguments to Short Thesis**
+- What data would disprove the bearish case?
+- Has management addressed the concerns publicly?
+- Are there independent analysts or auditors refuting the claims?
+- Is there a fundamental value floor (book value, sum-of-parts) that limits downside?
+- Has the stock already priced in the worst-case scenario?
+
+### 5. Options Market Signal Integration
+
+Read options positioning as a forward-looking indicator of expected moves:
+
+**Put/Call Ratio Analysis**
+- Put/Call open interest ratio > 1.5: heavy hedging or speculative bearish bet
+- Put/Call volume ratio spike: institutional protection buying (precedes downside)
+- Call/Put ratio spike: aggressive bullish buying or short hedge activity
+- Compare current ratio vs. 30/60/90-day average to identify anomalies
+
+**Implied Volatility Skew**
+- **Negative skew (normal for stocks)**: OTM put IV > OTM call IV — market pricing asymmetric downside
+- **Skew steepening**: increasing fear of downside, shorts adding OTM put protection
+- **Skew flattening or reversal**: call buying exceeds put buying — squeeze setup or bullish catalyst anticipated
+- Track 25-delta put IV minus 25-delta call IV as skew measure
+
+**Large Options Activity Signals**
+- Large OTM put purchases (protective hedges from longs or speculative shorts)
+- Heavy OTM call buying near key resistance: anticipation of short squeeze catalyst
+- Gamma exposure at strikes: dealer hedging requirements create mechanical price pressure at specific levels
+- Unusual options activity 1-5 days before price move: informed positioning
+
+### 6. Technical Analysis of Short Positions
+
+**Short Seller Cost Basis Estimation**
+- Average price of shares shorted (based on short interest trend vs. stock price timeline)
+- Are shorts currently at a profit (stock below average short price) or a loss (stock above)?
+- Underwater shorts = trapped shorts = higher squeeze probability as losses mount
+
+**Key Price Levels for Short Positioning**
+- Resistance zones where shorts typically initiate positions
+- Prior failed breakout levels (shorts cluster above failed resistance)
+- 52-week high: shorts often add above if they believe stock is overvalued
+- Volume-weighted average price of recent short interest build
+
+**Short Covering Patterns in Price Action**
+- Sharp V-reversal on elevated volume with no obvious news: forced covering
+- Gap-up openings held and extended: short sellers unable to lean on stock
+- Failure to break below support despite negative sentiment: shorts losing control
+- Morning spike followed by day-long grind higher: staggered covering through session
+
+**Support Levels Affecting Covering Triggers**
+- Key technical support: breakdown below = shorts add, hold = shorts must cover
+- 200-day moving average: institutional reference level where shorts reconsider
+- Prior consolidation zones: base building = shorts squeezed out on breakout
+
+### 7. Reporting Schedule and Data Lag
+
+**FINRA Short Interest Reporting Calendar**
+- Short interest is reported as of the 15th and last business day of each month
+- Data published approximately 4-5 business days after the settlement date
+- Result: up to a 2-week data lag between actual positioning and publicly available data
+- Critical caveat: short interest data reflects past positioning, not current
+
+**Exchange-Reported Short Interest**
+- NYSE and NASDAQ publish their own short interest data on similar schedules
+- Cross-reference exchange data with FINRA for completeness
+- Real-time short volume (vs. short interest) available daily from FINRA and exchanges
+
+**Using Short Volume Data for Fresher Signal**
+- Daily short volume (available same day via FINRA Rule 4560): not equal to short interest
+- Short volume / total volume ratio: measures daily bearish activity direction
+- Short volume ratio > 50% sustained over multiple days: active selling pressure
+- Limitation: covers only on-exchange transactions, misses OTC activity
+
+### 8. Risk Considerations
+
+**Risks for Short Sellers**
+- Unlimited loss potential: no cap on how high a stock can rise
+- Borrow recall: prime broker can force position closure on short notice
+- Dividend obligation: short sellers must pay dividends to the shares they borrowed
+- Regulatory restrictions: short sale restriction (SSR) rule triggers when stock falls 10% in a day, restricting short sales
+- Crowded short: many shorts in same name = all exit simultaneously on negative news = violent squeeze
+
+**Risks for Long Traders Playing Squeeze**
+- Crowded momentum trade: late entrants face no new buyers once squeeze exhausts
+- Fundamental deterioration: short thesis may be correct — stock declines post-squeeze
+- Entry timing risk: squeezes can reverse violently once covering is complete
+- Borrow constraints: difficulty exiting short at target because all brokers pulling borrow simultaneously
+- Regulatory risk: market manipulation scrutiny for coordinated squeeze activity
+
+**Position Sizing Guidelines**
+- Short squeeze plays: high risk/high reward, size accordingly (1-3% of portfolio maximum)
+- Risk is binary: squeeze fully materializes or fundamental thesis plays out
+- Define exit criteria before entry — both upside target and stop-loss level
+
+### 9. Data Sources
+
+**Short Interest Data**
+- **FINRA Short Interest Data**: finra.org/investors/short-sale-volume-data (official, free, twice-monthly)
+- **NYSE Short Interest Reports**: NYSE-listed stocks, semi-monthly
+- **NASDAQ Short Interest Reports**: NASDAQ-listed stocks, semi-monthly
+- **Shortvolume.com**: Free daily short volume data by ticker
+
+**Screeners and Analytics**
+- **Finviz**: Short float % in stock screener (sortable, free)
+- **Market Chameleon**: Short interest trend charts, borrow rate tracking
+- **Iborrowdesk.com**: Free near-real-time borrow rate data from Interactive Brokers and TD Ameritrade
+
+**Premium Short Data**
+- **S3 Partners**: Professional-grade short analytics, real-time borrow rates, predictive short interest
+- **Interactive Brokers Stock Loan Availability**: Borrow rate and availability for account holders
+- **Bloomberg Terminal**: SRFD function for comprehensive short interest data
+
+## Input Formats
+
+### Format 1: Single Stock Analysis
+```
+User: /short-interest GME
+
+Claude retrieves current short float, DTC, borrow rate, and computes Squeeze Score
+```
+
+### Format 2: Squeeze Potential Scan
+```
+User: /short-interest --scan squeeze-potential
+
+Claude screens for stocks meeting high Squeeze Score criteria (short float >20%, DTC >10, catalyst present)
+```
+
+### Format 3: Sector Short Analysis
+```
+User: /short-interest --sector technology
+
+Claude identifies most shorted technology stocks and evaluates comparative squeeze potential
+```
+
+## Output
+
+Provide a comprehensive short interest analysis report with the following sections:
+
+### 1. Short Interest Summary
+```
+Ticker:                  [TICKER]
+Short Float %:           XX.X%       (Threshold: >20% = High)
+Short Interest (shares): XX,XXX,XXX
+Days to Cover (DTC):     X.X days    (Threshold: >10 = Elevated)
+Borrow Rate:             X.X%        (Classification: Easy/Hard/Extreme)
+Short Interest Trend:    Increasing / Stable / Decreasing
+Last Reporting Date:     [Date]      (Note: ~2-week lag)
+```
+
+### 2. Squeeze Score Breakdown
+```
+Component                     Condition          Points
+Short float > 20%             YES / NO           X/3
+DTC > 10 days                 YES / NO           X/2
+Recent positive catalyst       YES / NO           X/2
+Price above 50-day MA         YES / NO           X/1
+Float < 50M shares            YES / NO           X/1
+Borrow rate > 5%              YES / NO           X/1
+                              TOTAL SCORE:       X/10
+
+Squeeze Probability: Low / Moderate / High / Very High / Extreme
+```
+
+### 3. Short Thesis Summary
+- Primary bear thesis (1-3 sentence summary of why shorts are positioned here)
+- Source of short thesis (activist report, valuation, fundamental deterioration)
+- Short seller credibility assessment
+
+### 4. Counter-Thesis
+- Key arguments that could prove shorts wrong
+- Fundamental floor (book value, earnings power)
+- Upcoming catalysts that could force covering
+
+### 5. Options Market Context
+- Put/Call ratio vs. 30-day average
+- IV skew assessment (steep put skew vs. flat)
+- Any unusual options activity flagged
+
+### 6. Technical Setup
+- Is stock above or below 50/200-day moving average?
+- Key support and resistance levels
+- Is price action consistent with squeeze initiation or continued decline?
+
+### 7. Risk/Reward Assessment
+- For long (squeeze play): upside target, stop-loss, probability-weighted expected return
+- For short (bearish thesis): downside target, covering trigger, maximum loss scenario
+
+### 8. Monitoring Triggers
+- Short interest change threshold that would upgrade or downgrade squeeze probability
+- Catalyst calendar (earnings date, product event, regulatory decision)
+- Borrow rate level that signals imminent covering pressure
+- Price level that would technically confirm squeeze initiation
+
+## Standard Signal Output
+
+All analysis concludes with this standardized block:
+
+```
+## Thesis Invalidation
+
+After delivering the analysis signal, specify what would reverse it:
+
+**If signal is BULLISH — thesis breaks if:**
+- short float rises above 20% AND days-to-cover increases >10 without a catalyst
+- [One or two more triggers drawn from this analysis's own drivers, each with a threshold]
+
+**If signal is BEARISH — thesis breaks if:**
+- short float drops below 3% AND squeeze signals activate (borrow rate >50%)
+- [One or two more triggers drawn from this analysis's own drivers, each with a threshold]
+
+**Re-run this analysis when:**
+- [ ] Next earnings release
+- [ ] Price moves ±15% from current level
+- [ ] 60 days have elapsed
+- [ ] Material news event (acquisition, leadership change, regulatory decision)
+
+╔══════════════════════════════════════════════╗
+║              INVESTMENT SIGNAL               ║
+╠══════════════════════════════════════════════╣
+║ Signal:      BULLISH / NEUTRAL / BEARISH     ║
+║ Confidence:  HIGH / MEDIUM / LOW             ║
+║ Horizon:     SHORT / MEDIUM / LONG-TERM      ║
+║ Score:       X.X / 10                        ║
+╠══════════════════════════════════════════════╣
+║ Action:      BUY / HOLD / SELL               ║
+║ Conviction:  STRONG / MODERATE / WEAK        ║
+╚══════════════════════════════════════════════╝
+```
+
+Score Guide: 8.0–10.0 Strongly Bullish | 6.0–7.9 Moderately Bullish | 4.0–5.9 Neutral | 2.0–3.9 Moderately Bearish | 0.0–1.9 Strongly Bearish
+Confidence: HIGH (strong data, clear signals) | MEDIUM (mixed signals) | LOW (limited data, conflicting signals)
+Horizon: SHORT-TERM (1 week–3 months) | MEDIUM-TERM (3 months–1 year) | LONG-TERM (1+ years)
+
+**Disclaimer:** Educational analysis only. Not financial advice.