FAS & FAZ short interest situation

The FAZ/FAS short interest situation that Bespoke highlights is very interesting. "Everyone" has figured out that after massive moves they are skewed to the downside, as XLF is up 7% in a period FAS is down 71% and FAZ is down 95%.

The theory is that FAZ/FAS are long volatility, and since bottom volatility has been dropping every day. Shorting FAZ/FAS is like selling options. It works both ways -- they are down big because they are capable of making huge parabolic moves.

I do like the idea that volatility went to an all-time extreme and now could go the other way almost as strong. I don't think XLF has gone too far so I can't buy FAZ yet, but if FAS goes for a superspike run to 50+ into late summer, going the other way will look very attractive.