Short Interest
AdvancedShort interest is the total number of a company's shares that have been sold short and not yet bought back, often expressed as a percentage of the shares available for trading.
When investors sell short, they borrow shares and sell them, hoping to buy them back later at a lower price. Short interest measures how many shares are currently held in short positions.
High short interest suggests many investors expect the share price to fall. For example, if 15% of a company's freely traded shares are sold short, a significant group of investors is betting against the company.
Short interest is published regularly by exchanges or regulators in many markets. In some countries, regulators also require large individual short positions to be disclosed.
High short interest can be read in different ways. It may signal real problems, such as weak finances or suspected accounting issues. But it can also lead to a short squeeze: if the price rises, short sellers rush to buy shares to limit their losses, pushing the price up further. This happened dramatically with several heavily shorted shares in early 2021. Short interest is often considered together with days to cover.
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