Short Interest refers to the total number of shares of a stock that have been sold short but not yet covered or closed. It's an indicator of the level of bearish sentiment or negative sentiment towards a particular stock. When an investor sells a stock short, they borrow shares from a broker and sell them in the market with the expectation that the price will decrease. If the price does decrease, the investor can buy back the shares at a lower price and return them to the broker, pocketing the difference as a profit.Short interest is usually reported as a ratio, which is the number of shares sold short divided by the total number of shares outstanding.For example, if a stock has 1 million shares outstanding and 200,000 shares sold short, the short interest ratio would be 20%.A high short interest ratio can indicate that many investors believe the stock is overvalued and are betting that the price will decrease. It can also indicate that there is a high level of speculation about the stock. Conversely, a low short interest ratio can indicate that the stock is undervalued and that investors are bullish on the stock.It's important to note that short interest is a backward-looking indicator, as it reflects the number of shares that have been sold short but not yet covered. It does not indicate the direction in which the stock price will move in the future, and it's not a guarantee of profit or loss.Additionally, short interest can change rapidly, and it's always recommended to pay attention to other indicators and market conditions before making investment decisions.
