Number-of-Shares-Shorted

When people evaluate stocks, they look to the upside and determine how far it can go. Using data they hear from reports or looking at a stock chart, they are trying to figure out what will propel the company further. However, there is the flip side to the equation that the average investor may not know, and that is the ability to short a stock. Shorting a stock is when you borrow the shares from your broker, sell them to the market, hoping to buy back at a lower price and return them to the broker, keeping the difference. Shares that are being shorted could indicate people are seeing indications the company stock could be pulling back.

Updated over a year ago
View currently updated edicational stories
Filter Number of Shares Shorted

Number of shares shorted is a key number to look out because you want to see how many people are betting against the company so to speak. Another terminology you may have heard is short interest. For example, if there are 100 shares outstanding and 10 people are short, then there is a 10% short interest in the company. Many people fail to realize there are people on the other side of the fence, hoping the company falls in stock price. The numbers of shares shorted and who is shorting them can be crucial in determining where the stock may be going.

You want to look at the institutional investors to understand where their money is going because it could be a good insight as to where they think the market is going to go. Along the lines of shares shorted, you may want to observe who is selling there stock at the company, such as executives. If they’re buying it, they may be confident that the company will continue to succeed.

When you run the numbers side by side, it is almost a vote to see where the stock is going. If you see there is 60% short interest in the stock at the moment, you may not want to get in front of that train buying for the upside. This information is useful when comparing all forms of data because it digs below the surface level of the chart and tells you where the money is actually going. Using this in conjunction with the Money Flow Index may be a good combination as to anticipate momentum and price action. Be sure to use this on a demo account to ensure it fits your trading style. Always research to better understand the tools you are using and to view other opinions on the matter. Again, there are almost always people betting against the company, you should know how many and if it is larger than the people buying.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com

Did you try this?

Run My Watchlist Analysis Now

   

My Watchlist Analysis

Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
All  Next Launch Module
Check out Investing Opportunities. You can also try Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Tools for Investor Private

When running Investor Education price analysis, check to measure Investor Education market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Investor Education is operating at the current time. Most of Investor Education value examination focuses on studying past and present price action to predict the probability of Investor Education future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Investor Education price. Additionally, you may evaluate how the addition of Investor Education to your portfolios can decrease your overall portfolio volatility.
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go