Try a website with a stock quote service if you want to know more about the short-interest ratio of a particular company (the number and percentage of shares that are sold short compared to its average daily volume). Try finance or stock exchange sites. We’ve listed some of the most popular sites that provide information on short interest for certain stocks.

Key Takeaways

• Short sellers borrow money to purchase shares and then sell them at the open market. They then buy the shares again, but at a cheaper price, repay the loan and pocket the profit.
• The number of shares that have been shorted but are not yet covered or settled.
• A significant change in short interest can indicate that investors are becoming more bullish or bearish about a particular stock.
• You can get general information about shorting a stock from any site that offers a quoting system.
• The stock exchanges will have more information on short interest.

Shorted stocks and short interest

You must understand the fundamentals of short-term trading before we start looking at where to find this data.

Shorted Stocks

Short selling is an investment strategy that experienced traders use to speculate on the future price of shares. This involves borrowing shares and then selling them at the open market. You can sell securities or stocks that you do not own.

Then, you buy the shares and return them to your lender. You can close the short position and keep your profit. Investors sometimes use short selling to hedge other positions. 1

It is not something you should take lightly, particularly if you are a new investor. Only experienced traders should consider it. Investors will have to be willing to take on more risk as they are using borrowed capital to make their initial purchase. There’s also a chance that the price of the security will increase rather than fall, meaning the investor could suffer a loss.

Short Interest

Short interest is the number of short shares sold that are not yet covered or closed. The short interest is usually expressed as a per cent of the number of shares that have been sold short divided by the outstanding total shares. A company with 10% short interest, for example, might have 10,000,000 short shares of the 100 million outstanding shares.

The short interest can be a good indicator of the market’s mood. The large changes in short interest can also be a warning sign, as they show that investors are becoming more bullish or bearish on the stock. Extremely high levels of short interest indicate investors who are overly or very pessimistic.

Short interest is a common technical indicator used by day traders. When there is high short interest, and a breakout happens, traders may scramble to cover shorts. This creates a snowball effect that traders can use to compound profits. It is called a short squeeze.

Important

The opposite of a long-term position is a short-term one. When investors take a long position, they actually own the assets rather than borrow them. Long-term investors believe that the price of an asset will increase in the future.

Short Interest Data on a Specific Stock

You can find free information on certain websites if you are looking for more details about the shorted shares of a stock, including specific numbers, daily average share volume or days to cover. These are the top sites where you can find this information and use it to guide your shorting strategies.

Stock Exchanges

Investors can use the general reports issued by individual stock exchanges at the end of each month as a benchmark for short-selling. In general, the free data are only updated twice a week. Tables of short interest typically only show data for the two most recent reporting dates. Data on daily short interest is available, but only through subscription.

• New York Stock Exchange: The NYSE says that this data comes from brokers as part of its regulatory requirements. The specific website you will need to visit is determined by the stock exchange that trades a certain stock. The NYSE’s short-interest ratio can be a good indicator of overall market sentiment. The NYSE Group short interest file is a semi-monthly archive that includes uncovered shorts going back to 1988.
• Nasdaq: Nasdaq releases short interest reports at the middle and end of each month. The information used by traders is, therefore, always slightly out-of-date, and actual short interest could be substantially different from what was reported. You can use Nasdaq Trading Data to find Nasdaq Monthly Short Interest Tool if the stock is traded on Nasdaq.

Other Websites

You can access free financial information from a number of websites. It’s just a matter of knowing where to look. You can find out about short positions on specific stocks or the market as a whole.

• Yahoo! Finance: Click on the Screeners link on the homepage to get a list of the most shorted stock based on a percentage of outstanding shares. You can also access short information about specific stocks. You can find brief details by searching for the stock and clicking on the Statistics tab. Scroll down to Share Statistics for key information. This includes the number of shares shorted for the company, as well as its short ratio.
• The Wall Street Journal provides short-sale information on any company tracked by the “Market Data page”. Search for the ticker of the stock, and then click on “Shares Sold short” in the right column.
• Other Websites: Many financial sites track data on short interest. Sites like MarketBeat.com provide the largest short positions, increases and decreases. 6

What is short-interest data?

The short interest data refers to the number of shares sold by investors for a specific stock who have not yet closed or covered the position. This data is expressed as a per cent, which is the number of shorted shares divided by the number of outstanding stocks.

Who collects short-interest data?

Financial Industry Regulatory Authority requires short interest reporting. Broker-dealers must report short positions in all accounts to the exchanges twice a month under the regulations of FINRA. The short positions must be reported to the exchanges by 6 pm EST, the second trading day following the settlement date specified by FINRA. 7

Is short interest good or bad?

Investors who have a large change in short interest are either bullish or negative about a stock. Stocks that are heavily shorted could indicate that investors are becoming more pessimistic.

How do I use short-interest data?

Short interest data can be used to gauge the market’s mood. Short-interest data can be expressed as a ratio. The short-interest ratio is calculated by dividing the total number of shares that a company has by the number of outstanding shares that are not held.

The Bottom Line

Investors can get general information on shorting a stock from many financial websites as well as on the exchange website where the stock is traded. Divide the number of shares sold short for a particular company by its average daily volume to calculate the short interest ratio. The brief interest can be a good indicator of the market’s sentiment towards a stock. Stocks that are heavily shorted may indicate a negative outlook for the company.

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