Specialist Short Sale Ratio

AAA

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.

RELATED TERMS
  1. Short Selling

    The sale of a security that is not owned by the seller, or that ...
  2. Pivot Point

    A technical analysis indicator used to determine the overall ...
  3. Member Short-Sales Ratio

    A ratio comparing the number of short sales transacted on behalf ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Mutual Fund Liquidity Ratio

    A ratio published monthly by the Investment Company Institute ...
  6. Sentiment Indicator

    A graphical or numerical indicator designed to show how a group ...
RELATED FAQS
  1. What is the difference between a drawdown in banking and a drawdown in trading?

    The term "drawdown" appears in both the banking world and in the arena of trading, but it has completely different meanings ... Read Full Answer >>
  2. How can the exponential moving average be used in swing trading?

    The exponential moving average (EMA) is a variation of the simple moving average that places more emphasis on the latest ... Read Full Answer >>
  3. Why is the Triple Exponential Moving Average (TEMA) important for traders and analysts?

    The triple exponential moving average (TEMA) is important for traders and analysts because it is useful as a trend indicator. ... Read Full Answer >>
  4. Are exponential moving averages more effective than simple or weighted moving averages?

    An exponential moving average (EMA) uses an exponentially weighted multiplier to give more weight to recent prices, which ... Read Full Answer >>
  5. How can I profit from a decline in the drugs sector?

    Profit from a decline in the drugs sector by short selling or by purchasing futures contracts or put options. Investors use ... Read Full Answer >>
  6. Why is trading volume important to investors?

    Trading volume, or volume, is the number of shares or contracts that indicates the overall activity of a security or market ... Read Full Answer >>
Related Articles
  1. Charts & Patterns

    Why These May Be the Top 4 Growth Stocks of 2015

    These four stocks have high upside potential in 2015.
  2. Chart Advisor

    Interested in Growth Stocks? See These 4 ETFs

    Given the rise in popularity of growth ETFs, there are several interesting growth stock choices for investors.
  3. Chart Advisor

    Watch Out For Falling Copper Prices

    Commodity traders have been turning their attention toward copper prices over the past several weeks.
  4. Chart Advisor

    Watch for Bullish MACD Crossovers in These Stocks

    These stocks are trending higher but recently experienced a pullback. Watch for a bullish MACD crossover to indicate upward momentum is continuing.
  5. Trading Strategies

    Bucking The Trend With Pattern Failure Strategies

    The best trade could be in the opposite direction when a classic price pattern doesn't behave according to ideal rules.
  6. Chart Advisor

    Buying Opportunities on Upside Wedge Breakouts

    Find buying opportunities in these stocks, which have seen their prices break out of long-term declining wedge patterns.
  7. Charts & Patterns

    Are These the Top Dividend Stocks of 2015?

    These dividend-paying companies offer a lot more than just dividends.
  8. Charts & Patterns

    Top 10 Alternative Energy Stocks for 2015

    As energy demands continue to rise, the alternative energy sector is heating up. Here are the top 10 promising alternative energy stocks for 2015.
  9. Charts & Patterns

    Why Is Chipotle So Successful & Popular?

    Chipotle's emphasis on simplicity and high-quality ingredients have made the restaurant immensely popular among consumers and, in turn, investors.
  10. Chart Advisor

    Trade Europe and a Strong USD with this ETF

    With ETFs is't now possible to construct a portfolio of European equities and simultaneously hedge the currency risk.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center