Short Interest Ratio
The short ratio (or short interest ratio, SIR) for a public company is a metric signaling prevailing investors' sentiment. The ratio is calculated by dividing the number of shares sold short by the average daily trading volume, generally over the last 30 trading days. The ratio represents the number of days it takes short sellers on average to repurchase all the borrowed shares. The ratio is used by both fundamental and technical traders to identify trends.
The short interest ratio can also be calculated for entire exchanges to determine the sentiment of the market as a whole. If an exchange has a high short interest ratio of around five or greater, this can be taken as a bearish signal, and vice versa.
Read more about Short Interest Ratio: Short Squeeze
Famous quotes containing the words short, interest and/or ratio:
“The individual, the great artist when he comes, uses everything that has been discovered or known about his art up to that point, being able to accept or reject in a time so short it seems that the knowledge was born with him, rather than that he takes instantly what it takes the ordinary man a lifetime to know, and then the great artist goes beyond what has been done or known and makes something of his own.”
—Ernest Hemingway (1899–1961)
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—Gerard Manley Hopkins (1844–1889)
“Personal rights, universally the same, demand a government framed on the ratio of the census: property demands a government framed on the ratio of owners and of owning.”
—Ralph Waldo Emerson (1803–1882)