/short-interest

description: Analyze short interest, short squeeze potential, and bearish positioning signals

Short Interest Analysis

⚠️ Data Verification — Do This Before Any Analysis

Before running any analysis, always retrieve the latest market data for the ticker:

1. **Fetch current price** — use web search or ask the user for the live price, 52-week range, and market cap. Never assume a price from training data. 2. **Confirm key figures** — recent earnings, revenue, key ratios (P/E, P/S, etc.) as applicable to this skill. 3. **State your data source** — fill in the `Data & Sources` header (next section) so the origin, as-of date, retrieval path, and confidence of every figure are explicit at the top of the output. 4. **Flag stale data explicitly** — if live data is unavailable, display this warning before proceeding:

> ⚠️ **Live data unavailable.** The following analysis uses training-data estimates which may be significantly out of date. Verify all prices and metrics before making any decisions.

Never silently substitute training-data estimates for current prices. When in doubt, ask the user to paste the latest quote.

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📋 Data & Sources Header — Open Every Output With It

The first thing in the output is this provenance block, filled in — never left as placeholders. It is the standard documented on the [Data & Accuracy](https://yennanliu.github.io/InvestSkill/data-and-accuracy.html) page and the first thing `result-validator` looks for:

Data & Sources
  As of:      <date the figures represent, e.g. 2026-06-30>
  Source:     <primary docs — SEC EDGAR 10-K/10-Q, company IR, FRED, exchange data …>
  Retrieval:  <pasted by user | web/tool retrieval | model memory>
  Confidence: <HIGH | MEDIUM | LOW>

• `Retrieval: model memory` must be paired with `Confidence: LOW` — memory is a placeholder until confirmed against a primary source.
• Mixed sources: list each with its own as-of date rather than blending them.
• Sources disagree on the same figure (a closing price, a deal term): prefer the primary source (SEC filing, company release, exchange data) over an aggregator, then the most recent dated one. Show both values with their sources and dates, say which you used and why, and never average them.
• Data the user pasted is reported as `pasted by user`; do not upgrade its confidence beyond what the user's own source supports.

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Comprehensive analysis of short selling activity, squeeze potential, cost-of-borrow dynamics, and bearish positioning signals for US-listed stocks. Combines FINRA short interest data, options market signals, and technical context to assess directional risk.

Analysis Framework

1. Short Interest Overview

Measure the current level and trend of bearish positioning:

**Core Short Interest Metrics**

• **Short interest (shares)**: Total number of shares sold short and not yet covered or closed
• **Short float %**: Short shares / Total float (shares available for public trading)
• **Short interest as % of shares outstanding**: Short shares / Total shares outstanding (includes locked-up insider shares)
• Float % is the more actionable metric — tighter supply amplifies squeeze dynamics

**Short Float % Thresholds**

Short Float %     Interpretation
<2%               Negligible — minimal bearish conviction
2-5%              Low — modest skepticism or hedging
5-10%             Moderate — meaningful bearish positioning
10-20%            Elevated — significant short thesis in market
20-30%            High — heavy bearish conviction, squeeze potential
>30%              Extreme — high risk environment (squeeze OR fundamental collapse)

**Days to Cover (Short Interest Ratio)**

• Formula: Short interest (shares) / Average daily trading volume
• Represents: how many trading days it would take all shorts to cover at normal volume
• Also called: Short Interest Ratio (SIR)

DTC Range         Interpretation
<1 day            Very low — shorts can exit quickly
1-3 days          Low — manageable exit risk for shorts
3-5 days          Moderate — some covering friction
5-10 days         Elevated — meaningful covering difficulty
>10 days          High — forced covering creates significant price pressure
>20 days          Extreme — structural squeeze conditions present

**Change in Short Interest Trend**

• Compare last 4 reporting periods (approximately 2 months)
• Increasing short interest: bears building positions, growing conviction against stock
• Decreasing short interest: short covering, thesis deterioration, or squeeze in progress
• Spike in short interest: new negative catalyst or activist short report
• Rapid decline in short interest: covering rally in progress, thesis proved wrong

2. Short Squeeze Potential Assessment

**Squeeze Score (0-10 Composite)**

Assign points based on the following conditions:

• Short float > 20%: +3 points (high short interest is the core prerequisite)
• Days to Cover > 10: +2 points (exit difficulty creates forced buying)
• Recent positive catalyst (earnings beat, product launch, partnership, FDA approval): +2 points
• Strong price momentum (price above 50-day moving average): +1 point
• Limited share supply (small float < 50 million shares): +1 point
• High borrow rate (annualized cost > 5%): +1 point (shorts paying carrying cost = time pressure)

Squeeze Score     Probability Assessment
0-2               Low — insufficient conditions for meaningful squeeze
3-4               Moderate — partial conditions met, monitor for catalysts
5-6               High — most conditions met, squeeze possible on catalyst
7-8               Very High — strong squeeze setup, catalyst likely to trigger
9-10              Extreme — textbook squeeze conditions, high probability event

**Three Requirements for High-Probability Squeeze**

All three must be present simultaneously: 1. **High short interest**: Float% > 15% AND DTC > 7 days (supply-demand imbalance) 2. **Catalyst or forced covering trigger**: positive news,