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What is short interest?

In one line: Short interest is the number of a stock's shares that have been sold short and not yet bought back, often shown as a percent of the share float.

Trading glossary · Updated 2026-10-21

A simple example

A company has 50 million shares in its float (the shares free to trade — see Share float). Traders have sold 10 million of them short.

Short interest as a percent of float: 10 ÷ 50 = 20%.

The stock trades about 2 million shares a day on average. "Days to cover" = 10 million ÷ 2 million = 5 days. That's roughly how long it would take short sellers to buy back, if they made up all the normal buying.

How to read it

• Low (a few percent of float): most stocks sit here.
• High (often 20% or more of float): many traders are betting the price will fall.
• High days to cover: buying back would take a long time, so a rush to exit could push the price hard.

In the US, FINRA collects short interest from brokers and publishes it twice a month, so the number is always a little old.

Why it matters

Short sellers must buy shares back to close. If the price rises fast, many may rush to exit at once. That buying can push the price up even more. That's a Short squeeze.

So a high short interest tells you a stock may move fast both ways. It's a reason to size smaller, not a signal on its own. Read more in Short selling.

A common mistake

Treating high short interest as a buy signal. Sometimes short sellers are right, and the stock keeps falling. A squeeze needs a trigger, like strong news, and no one can time it reliably.

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