Short Interest

The total number of shares that have been sold short but not yet covered.

What Is Short Interest?

Short interest measures the total number of shares of a stock that have been sold short by investors but not yet covered (bought back). It represents the total bearish bet against a stock and is reported bi-monthly by exchanges.

Short Interest Ratio

The short interest ratio (also called "days to cover") divides total short interest by average daily trading volume. A ratio above 5-7 days is considered high and could set up a short squeeze. The higher the ratio, the longer it would take all short sellers to buy back their shares.

Short Squeezes

When a heavily shorted stock starts rising unexpectedly (perhaps due to a positive earnings beat), short sellers are forced to buy shares to cover their positions and limit losses. This buying pressure pushes the stock even higher, forcing more shorts to cover — creating a self-reinforcing upward spiral known as a short squeeze. GameStop in January 2021 was the most famous example.