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:
“For one swallow does not make a summer, nor does one day; and so too one day, or a short time, does not make a man blessed and happy.”
—Aristotle (384–322 B.C.)
“If a man walk in the woods for love of them half of each day, he is in danger of being regarded as a loafer; but if he spends his whole day as a speculator, shearing off those woods and making earth bald before her time, he is esteemed an industrious and enterprising citizen. As if the town had no interest in its forests but to cut them down!”
—Henry David Thoreau (1817–1862)
“People are lucky and unlucky not according to what they get absolutely, but according to the ratio between what they get and what they have been led to expect.”
—Samuel Butler (1835–1902)