Glossary
Short interest
The number of a company’s shares that have been sold short and not yet bought back, reported twice a month and read alongside float and days to cover.
Short interest is the total number of a stock's shares that investors have sold short and have not yet covered. It is a snapshot of open bearish bets. Traders watch it because a large short position means many holders who will eventually need to buy shares back, which can add fuel to a rally, and because it shows how many professionals expect a decline.
How it works
In the US, broker-dealers report their customers' open short positions to FINRA twice a month, as of mid-month and month-end settlement dates, and the totals are published several business days later. The raw share count is rarely useful on its own, so it is turned into two ratios.
What it does and does not tell you
High short interest is not a forecast. It can mean informed investors have found real problems, or that hedgers are offsetting convertible bonds or long positions elsewhere. It also ages quickly: the published figure is already more than a week old when it appears. Read changes over several reports, compare against the stock's own history and sector peers, and remember that a crowded short only becomes a squeeze when buying pressure shows up.