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.

Investopedia explains '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.



comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center