how to use short interest
if a stock has a rising level of short interest it doesn t mean that the stock will fall in price but only that a high number of investors are betting that the stock will fall in price an investor can calculate short interest or short float for a stock by dividing the number of shares sold short by the float by the total number of shares available for the public to buy short float percentage number of shares sold short number of shares in floatthis percentage indicates the percentage of shares available to the public that is borrowed if a company has 10 million shares of stock outstanding and 1 million shares are sold short the total short interest is 10 short interest can be used as an indicator of market sentiment for a company s stock or the market as a whole and some bullish investors see high short interest as an opportunity there are some limitations to using short interest as a marker short interest reports such as those provided monthly by the new york stock exchange nyse are not timely and may not reflect market conditions 2 also stock can be heavily shorted for a long period without seeing a short squeeze or a price decline 