Short interest & days-to-cover

Short interest is the number of shares sold short — bets that the price will fall. On its own the share count means little; what matters is how it compares to trading volume.

Days-to-cover

Days-to-cover = short interest ÷ average daily volume. It estimates how many days of normal trading it would take shorts to buy back their shares. A high number (say 10+) means a crowded short that's hard to exit.

Why it cuts both ways

• Squeeze fuel: on good news, trapped shorts buy to cover, amplifying the rally.
• Bearish conviction: a persistent heavy short can also reflect real skepticism (e.g. dilution risk).

A common trap

Daily 'short volume' (from FINRA) is not short interest — it includes market-maker hedging, so it's normal to see 50–70%. Use the bi-monthly short interest and days-to-cover instead.