FTD on Yahoo Finance: A Deep Dive

FTD, standing for Failed to Deliver, is a crucial metric for investors to monitor potential issues with stock liquidity and market manipulation. Yahoo Finance, a widely used financial platform, provides access to FTD data, though it’s essential to understand its nuances and limitations.

What are Failed to Delivers?
When a stock is sold short, the seller is obligated to deliver the shares to the buyer within a specified timeframe (typically T+2, meaning two business days after the trade date). An FTD occurs when the seller fails to deliver these shares. While FTDs can arise from genuine logistical or administrative errors, persistent or high levels of FTDs can signal more serious problems. These problems include: difficulty locating shares to borrow, potential naked short selling (selling shares without borrowing them or reasonably believing they can be borrowed), and potential manipulation of the stock price.

Accessing FTD Data on Yahoo Finance
Yahoo Finance provides FTD data aggregated and released by the SEC. Here’s how to find it:

Navigate to Yahoo Finance (finance.yahoo.com).
Search for the stock ticker you’re interested in (e.g., “AAPL” for Apple).
Look for a section typically labeled “Statistics” or “Financials”. The exact location may vary depending on Yahoo Finance’s interface updates.
Within that section, you’re looking for data related to “Failed to Deliver” or “SEC Data”. It might be presented as a downloadable CSV file or displayed in a table.

Interpreting FTD Data

Analyzing FTD data requires careful consideration. Here are some key points:

Magnitude of FTDs: High numbers of FTDs are generally more concerning than low numbers. However, context is vital. A large-cap stock with billions of shares outstanding can absorb a larger number of FTDs without significant price impact compared to a small-cap stock.
Trend of FTDs: A consistent upward trend in FTDs is a red flag, suggesting increasing difficulty in sourcing shares or potentially indicative of manipulative short selling practices.
Comparison to Trading Volume: Compare the FTD volume to the average daily trading volume of the stock. A high ratio of FTDs to trading volume suggests a more significant issue.
Timeframe: Review FTD data over an extended period (e.g., several months or years) to identify patterns and trends.

Limitations of FTD Data

It’s crucial to recognize the limitations of FTD data available on Yahoo Finance and elsewhere:

Delayed Reporting: FTD data is typically released with a significant delay, often weeks after the actual failure to deliver occurred. This means the data reflects past activity, not necessarily current conditions.
Incomplete Picture: FTD data only represents failures to deliver that are reported. There may be unreported or undetected failures, which can skew the overall picture.
Complexity: The reasons behind FTDs can be complex and multifaceted. Attributing FTDs solely to naked short selling or manipulation is an oversimplification.

Conclusion

FTD data available on Yahoo Finance can be a valuable tool for investors, particularly when used in conjunction with other indicators and analysis. However, it’s essential to understand the data’s limitations and interpret it with caution. FTDs should be considered a potential warning sign, prompting further investigation into a stock’s liquidity, short selling activity, and overall market dynamics. Don’t base investment decisions solely on FTD data; conduct thorough due diligence and consult with a financial professional.