Short Interest Ratio


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Short Interest Ratio

In technical analysis and fundamental analysis, a ratio of the short-sold shares of a publicly traded company to the trading volume over a given period of time. This is an indication of the market's sentiment regarding a particular stock. A higher ratio indicates a feeling that the stock will decline in value, while a lower ratio indicates general belief that it will rise. It is not an exact indication, as it fails to take into account matters such as the potential exercise of convertible shares. Fundamental analysts interpret a high ratio as bearish because it shows an expectation for lower prices; on the other hand, technical analysts see a middling ratio as bullish as it may indicate a demand for a stock among hedge funds unable to cover a short sale. The short interest ratio is also called days to cover. See also: Hedge fund.
References in periodicals archive ?
For the Nasdaq in July, the SBI Weekly projected the short interest ratio would be 3.
In addition to reflecting daily short interest ratios on the New York Stock Exchange and Nasdaq markets, SunGard's Securities Borrow Indices (SBI) also cover the Standard & Poor's 500, 400 and 600 indices and their value- and growth-style components.
In the most recent reporting period, ORBZ had a short interest ratio of 17.
As the total number of shares sold short has risen, the short interest ratio (short interest divided by the average daily volume) has dropped.
8 million, for a short interest ratio of fewer than four days to cover.

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