Short Interest

Short interest

Total number of shares of a security that investors have sold short and that have not been repurchased to close out the short position. Usually, investors sell short to profit from price declines. As a result, the short interest is often an indicator of the amount of pessimism in the market about a particular security, although there are other reasons to short that are not related to pessimism. For example, hedging strategies for mergers and acquisition as well as derivative positions may involve short sales.

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Short Interest

The number of shares of a security that have been short sold, expressed as a percentage of the shares outstanding. Short selling is the sale of borrowed securities; those who engage in it must buy the same security soon thereafter in order to repay them. Some analysts thus believe that a high percentage of short interest is an indication that demand to buy a security will rise in the short-term.

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short interest

The number of shares of a particular stock that have been sold but have not yet been repurchased. Many analysts consider a large short position in a given stock bullish, because it represents future demand for the security as purchases are made to replace borrowed certificates. See also cushion theory.

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Short interest. Short interest is the total number of shares of a particular stock that investors have sold short in anticipation of a decline in the share price and have not yet repurchased.

Short interest is often considered an indicator of pessimism in the market and a sign that prices will decline.

However, some analysts see short interest as a positive sign, pointing out that short sales have to be covered, and that the need to repurchase can trigger increased demand and therefore higher prices.

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Short Interest

What Does Short Interest Mean?

The total number of shares (securities) in the market that have been sold short by customers and securities firms.

Investopedia explains Short Interest

Short interest typically is expressed as a percentage. For example, 3% short interest means that 3% of the outstanding shares are held short. If there is a large short interest in a particular company, this signals that investors are pessimistic about that company's future and the direction of its stock price.

Related Terms:
• Long Squeeze
• Short Sale
• Short Interest Ratio
• Short Squeeze
• Volume