They give the information to you automatically when you input a certain penny stock’s symbol. "Short Interest" is only calculated twice a month in stocks.
Short Interest Percentage Change: You should Buy stocks, where the Percentage Change in the Short Interest increases dramatically from one month to the next.
Example #1: SUGO
Date ________Short Interest__% Change Avg. __Daily Share Volume
Nov 15, 2010 ____29,584 _________8,072.38% __________150,704
Oct 29, 2010 ____362 ____________100.00% ______205,680
Example #2: SUGO
Date ________Short Interest % Change Avg. Daily Share Volume
Feb 15, 2012 ___103,097 _______117,055.68% ___19,185,963
Jan 31, 2012 ___88 ____________100.00 _______21,481,698
Dec 15, 2011 ___0 ____________-100.00 ________6,370,973
Nov 30, 2011 ___16,908 ________100.00 ________4,170,886
Nov 15, 2011 ___0 ____________-100.00 __________670,468
"Short Interest": What It Tells Us
Short interest is the total number of shares of a particular stock that have been sold short by investors but, have not yet been covered or closed out.
When expressed as a percentage, Short Interest is the number of shorted shares divided by the number of shares outstanding.
Short Interest serves as a market-sentiment indicator.
A large increase, or, decrease in a stock's Short Interest from the previous month can be a very telling indicator of investor sentiment.
Let's say that Microsoft's short interest increased by 10% in one month. This means that there was a 10% increase in the number of people who believe the stock price will decrease.
Many contrarian investors use Short Interest as a tool to determine the direction of the market.
The rationale is that if everyone is selling, then the stock is already at its low and can only move up.
Short Squeeze
A short squeeze occurs when short sellers are scrambling to replace their borrowed stock, thereby increasing demand and decreasing supply, forcing prices up. Short squeezes tend to occur more often in smaller cap stocks.
If a stock has a high short interest, short positions may be forced to liquidate and cover their position by purchasing the stock. If a short squeeze occurs and enough short sellers buy back the stock, the price could go even higher.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.