Short Interest
The number of shares sold short but not yet bought back, often shown as a percent of float.
Also called: short squeeze · days to cover
In plain language
High short interest means many participants are positioned for a decline. Every one of them is a future buyer, because closing a short requires buying.
Days to cover estimates how long it would take short sellers to exit at average daily volume. High readings indicate a crowded, hard-to-exit position.
A short squeeze happens when rising prices force short sellers to buy back, which pushes prices higher and forces more buying. These moves are fast and detached from fundamentals.
Why it matters
Shorting a heavily shorted stock carries squeeze risk that ordinary stop placement handles poorly, because squeezes gap through levels.
Common mistakes
- Treating high short interest as a reason to buy on its own.
- Shorting a crowded name with a tight stop that a squeeze will leap over.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A position that profits when the price falls.
The number of shares actually available for public trading.
How easily an asset can be bought or sold without moving its price.
A jump between one period’s close and the next period’s open with no trading in between.
How much and how quickly an asset’s price moves over a given period.