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Notable Thursday Option Activity: MMM, TXN, NOC
Thursday, November 30, 1:26 PM ET, by Market News Video Staff

Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume ...

Interesting June 2018 Stock Options for MMM
Monday, December 4, 12:00 PM ET, by Market News Video Staff

Consistently, one of the more popular stocks people enter into their stock options watchlist at ...

DIA, MMM, HD, IBM: Large Inflows Detected at ETF
Tuesday, December 5, 10:51 AM ET, by Market News Video Staff

Symbols mentioned in this story: DIA, MMM, HD, IBM Exchange traded funds (ETFs) trade just ...

Ex-Dividend Reminder: CNO Financial Group, Ladder Capital and Travelers Companies
Wednesday, December 6, 10:29 AM ET, by Market News Video Staff

On 12/8/17, CNO Financial Group Inc (CNO), Ladder Capital Corp (LADR), and Travelers Companies Inc ...

January 2018 Options Now Available For MMM
Thursday, December 7, 10:54 AM ET, by Market News Video Staff

Investors in 3M Co (MMM) saw new options become available today, for the January 2018 ...

  More articles:  1 2 next »

The New #4 Most Shorted Dow Component: MMM

By Market News Video Staff, Thursday, January 11, 9:38 AM ET
Play Video: What Short Interest Means

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The most recent short interest data has been released for the 12/29/2017 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the Dow Jones Industrial Average by "days to cover." There are a number of ways to look at short data, for example the total number of shares short; but one metric that we find particularly useful is the "days to cover" metric because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then compared to the average daily volume, in order to calculate the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.

In our new rank based on the most recent short interest data, 3M Co (NYSE:MMM) has taken over the position of #4 most shorted Dow component, from Travelers Companies Inc (NYSE:TRV) which is now in the #3 spot. The "days to cover" at 12/29/2017 was 4.90 for MMM, and 5.25 for TRV; this compares to the average across all Dow components of 3.51. The chart below shows the movement over time of the "days to cover" values of both MMM and TRV, versus the average Dow component.

Below is a chart showing the relative positions of MMM versus TRV over time within the 30 Dow components, with #1 representing the component with the highest "days to cover" value (most heavily shorted) and #30 representing the component with the lowest "days to cover" value (least heavily shorted):

A stock with a high "days to cover" value compared to its peers would be considered to have a higher level of short interest as compared to those peers. This could mean short sellers are using the stock to hedge a long bet elsewhere, or could also mean that short sellers believe the price of the stock will decline. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. So investors tend to keep an eye on that "days to cover" metric, because a high value could predict a sharper price increase should the company put out some unexpectedly good news short sellers might rush to cover positions, and if the "days to cover" number is high, it is more difficult to close those positions without sending the stock higher until the higher price produces enough sellers to generate the necessary volume.

Below is a three month price history chart comparing the stock performance of MMM vs. TRV:

MMM,TRV Relative Performance Chart

According to the ETF Finder at ETF Channel, MMM and TRV collectively make up 10.21% of the SPDR Dow Jones Industrial Average ETF (DIA) which is lower by about 0.1% on the day Thursday.

See what other ETFs contain both MMM and TRV
See what other stocks are held by DIA

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