What is Short %?
Short Interest % shows what percentage of the free float has been sold short. It measures bearish sentiment and can indicate potential for a short squeeze if the stock rises.
Think of it like this
10% short interest means 10% of available shares have been borrowed and sold by people betting the price will fall. They must buy those shares back later. High short interest = lots of people crowded in the 'wrong door' if the stock rises!
Formula
Short Interest % = (Shares Sold Short / Free Float) × 100%- Shares Shorted: Shares currently sold short
- Free Float: Publicly tradable shares
Why it matters
- Shows bearish sentiment from professional traders
- High short % can lead to explosive short squeeze
- Indicates potential volatility risk
- Shorts must eventually buy back (cover)
What's a good value?
< 5%
Low
Limited short interest, neutral sentiment
5-10%
Moderate
Some bearish sentiment present
10-20%
High
Significant short interest, watch closely
> 20%
Very High
Heavily shorted, squeeze potential
Real-world example
GameStop 2021: 140% of float shorted (more shares shorted than existed!) = historic squeeze. Tesla 2019: 20%+ short interest, frequent squeezes. Most S&P 500 stocks: 2-5% short interest = normal.
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