Short Interest

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DEFINITION of 'Short Interest'

The quantity of stock shares that investors have sold short but not yet covered or closed out. Short interest is a market-sentiment indicator that tells whether investors think a stock's price is likely to fall. Short interest can also be compared over time to examine changes in investor sentiment. Investors use short interest to make predictions about the direction a particular stock is headed, and to measure the bullishness or bearishness of investors' sentiment towards the market as a whole.

BREAKING DOWN 'Short Interest'

Short interest can be expressed as a percentage by dividing the number of shares sold short by the total number of outstanding shares. For example, 3% short interest means that 3% of the outstanding shares are held short. Short interest can also simply be expressed as the number of shares sold short but not yet covered or closed out. Short interest data is widely and easily available online.

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RELATED FAQS
  1. How is the short interest of a company related to a short squeeze of a company?

    The short interest is a predictor of whether a company is a short squeeze candidate. Generally, when there is a large fluctuation ... Read Full Answer >>
  2. How can I evaluate if a stock is a short squeeze?

    To evaluate whether a stock is a short squeeze, traders should examine its fundamentals, short interest and price history. ... Read Full Answer >>
  3. What is the difference between a short squeeze and short covering?

    "Short covering" and "short squeeze" are different terms to describe a situation involving short positions. A short squeeze ... Read Full Answer >>
  4. What is the difference between a short squeeze and a long squeeze?

    A short squeeze and a long squeeze are situations that can force traders and investors out of their positions. A short squeeze ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
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