– Glossary

Short-interest ratio

One of the oldest and most popular measures of market sentiment, the short-interest ratio represents the number of days it would take to cover all existing short positions at the stock´ s average daily trading volume for the previous month.. The ratio is derived from the action of investors who have borrowed stock and \"sold it short\" – betting on a future decline that will enable them to buy the shares back at a lower price for repayment to the lender. As an indicator, short interest shows the degree of negative sentiment among investors for a particular stock.

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