Glossary BG Image

Short ratio(or short interest ratio)

Browse Terms By Number or Letter:
Financial Terms By: s
Short ratio(or short interest ratio)

Number of shares of a security that investors have sold short divided by average daily volume of the security (measured over 30 days or 90 days). There are various interpretations of this ratio. When people short, it is usually (but not always) because they are pessimistic about the security's future performance. Shorting involves buying at at some point however. Hence, some would interpret a high short ratio as an indicator that there will be some buying pressure on the security that would increase its price.

Copyright © 2018, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.