Short interest percentage

Short interest is the number of shares that have been borrowed and sold short and not yet bought back. Divided by the number of shares available to trade, it becomes the short interest percentage: five percent means one share in twenty is currently a bet against the company. Exchanges publish the figure on a fixed schedule, so it is public, free and a couple of weeks old by the time you read it.

It is the most common thermometer for a crowded short. A high figure says many people expect the stock to fall, which is information. It also says that many people will have to buy the stock back one day, which is the fuel of a squeeze. Sellers of squeeze strategies rely on the second reading; the first is why the crowd got there.

Its cousin is days to cover: short interest divided by the shares that trade on a normal day, which says how many days the crowd would need to leave. Neither number tells you when. That is what the paid scanners claim to add, and what a pre-registered test has to check before anyone believes them.