Specialist Short Sale Ratio

DEFINITION of 'Specialist Short Sale Ratio'

A ratio used to determine the sentiment of specialists on the New York Stock Exchange (NYSE) versus the sentiment of the market as a whole. The specialist short sale ratio compares the total number of shares sold short by specialists on the NYSE to the total number of shares sold short by all participants on the NYSE. Since specialists are sophisticated market participants with a unique level of information about trading activity, technical analysts reason that by looking at their behavior they can gain insight into underlying trends in the market.

BREAKING DOWN 'Specialist Short Sale Ratio'

Interpretation of the specialist short sale ratio requires a technician to first determine the "normal" level for it. Then the technician will look for significant deviations from the normal level, which will indicate a change in sentiment.
Since specialists seek to make money for their own account, specialists are expected to increase their short sales relative to the market when they have a bearish sentiment. Conversely, if specialists are bullish, they will decrease their short selling. Thus, increases to the specialist short sale ratio are a bearish signal, while decreases are a bullish signal.

RELATED TERMS
  1. Specialist

    A member of an exchange who acts as the market maker to facilitate ...
  2. Write Out

    A dual trade transaction enacted by a specialist in an individual ...
  3. Specialist Firm

    The firms that hire the specialists to represent companies listed ...
  4. Specialist Unit

    A group of firms or individuals that act as a market maker for ...
  5. Negative Obligation

    An obligation of NYSE specialists to remain on the sidelines ...
  6. Stopped Order

    A market order on the NYSE that is stopped from being executed ...
Related Articles
  1. Managing Wealth

    E-Marketing Specialist: Career Path & Qualifications

    Learn more about the duties and responsibilities performed by eMarketing specialists and common career paths this profession takes.
  2. Financial Advisor

    eMarketing Specialist: Job Description & Average Salary

    Understand the scope of work of an e-marketing specialist, and learn about the career's required education, skills and average earnings.
  3. Investing

    Short Interest: What It Tells Us

    This figure can be a real eye-opener about the market sentiment surrounding a given stock.
  4. Investing

    The NYSE And Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.
  5. Trading

    Short Interest: What It Tells Us

    A stock’s short interest is the total number of shares that investors have sold short but have yet to close.
  6. Financial Advisor

    What the Ultra-Wealthy Want from Their Advisors

    When accessing products and solutions, the wealthy prefer using their relationship manager to a specialist, according to a new study.
  7. Markets

    The 5 Most Shorted NYSE Stocks (VALE, CHK)

    Understand what a short sale is and why people would want to initiate a short strategy. Learn about the top five most shorted stocks on the NYSE.
  8. Investing

    Short Selling Analytics

    One issue with data on short selling is that it is not real-time in nature, unlike most other market data. Most major exchanges such as the New York Stock Exchange, Nasdaq, and the Toronto Stock ...
  9. Investing

    Learn About the New York Stock Exchange

    The New York Stock Exchange (NYSE) is nicknamed the “Big Board,” and for good reason. It’s the largest, oldest and best-known stock exchange in the world.
  10. Investing

    The Basics Of Short Selling

    Short sellers enable the markets to function smoothly by providing liquidity, and also serve as a restraining influence on investors’ over-exuberance.
RELATED FAQS
  1. Who employs the specialists at New York Stock Exchange (NYSE)? Do they work for themselves, ...

    Before we address this question, let's review what specialists do. Specialists are people on the trading floor of an exchange, ... Read Answer >>
  2. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist ... Read Answer >>
  3. A _______ is a person on the trading floor of certain exchanges who holds an inventory ...

    The correct answer is d. A good example of an exchange using the specialist system is the NYSE. Each stock listed on the ... Read Answer >>
  4. When a floor broker asks a specialist, “How’s PDQ?” ...

    The correct answer is d) When the specialist gave the floor broker the quote of “59.20 to 35; 6 by 11,”  the quote meant ... Read Answer >>
  5. When a floor broker asks a specialist, “How’s PDQ?” ...

    The correct answer is d. When the specialist gave the floor broker the quote of “59.20 to 35; 6 by 11,” the quote meant that ... Read Answer >>
  6. What's the average salary of a human resources (HR) specialist?

    Discover the national average salary for a human resources (HR) specialist in the as well as for regions throughout the United ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center