Short Interest

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Short-Interest Theory

    A theory which holds that a security with a high degree of short ...
  2. Short Selling

    The sale of a security that is not owned by the seller, or that ...
  3. Short Squeeze

    A situation in which a heavily shorted stock or commodity moves ...
  4. Cushion Theory

    The theory used when many investors have taken a short position ...
  5. Bear

    An investor who believes that a particular security or market ...
  6. Bear Trap

    A false signal that the rising trend of a stock or index has ...
Related Articles
  1. The Short Squeeze Method
    Active Trading Fundamentals

    The Short Squeeze Method

  2. Short Interest: What It Tells Us
    Active Trading Fundamentals

    Short Interest: What It Tells Us

  3. The Truth About Naked Short Selling
    Options & Futures

    The Truth About Naked Short Selling

  4. The Short And Distort: Stock Manipulation ...
    Active Trading Fundamentals

    The Short And Distort: Stock Manipulation ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center