Short Interest by Trade Aptitude

Yesterday’s results: The suggested trade didn’t trigger. 

Today’s Best S&P Futures Turning Points: Buy 5908.75 stop 5903.75 if price retraces back from above. Short 5869.00 stop 5873.00 if price retraces back from below.  

The World Index: (+100/-100) eases from -29 to -14 with most of the world mildly Bearish on lower volatility. 

Catalysts: Fed’s Bowman @ 9:00, Barkin @ 12:00. Existing Home Sales @ 10:00. Crude Oil Inventories @ 10:30. Fed’s Beige Book @ 14:00. TSLA earnings after the close. 

Quick Tip: Short Interest

Short interest is a great “off-the-price-chart” indicator you can add to your research for stock and option trades. It’s the number of shares of a particular stock that have been sold short but have not yet been bought back (closed). 

If short interest is high, it suggests bearish sentiment and an unusually low short interest suggests bullish sentiment.

Here are two popular metrics that you can analyze for edge: 

Short Interest Ratio (SIR) or Days to Cover - Total number of short shares divided by the average daily trading volume. This gives you the number of days it would take for all short positions to be covered (or closed) if the stock were to rise suddenly, forcing short sellers to buy shares, a “short squeeze.” Any value over 5 is considered high. 

Percentage of Float Shorted - The percentage of a stock’s float (the number of shares available for trading) that has been sold short. Over 20% is extremely bearish and vulnerable to a short squeeze (which is bullish). 

Your brokerage trading platform may have these metrics and if not, try Finviz.com or BarChart.com. 

Our trading teams focus on multiple strategies for day trading futures and high-probability candidates for swing trading options. Maybe you'll fit right in. You can try either or both risk-free.

Trade Fearlessly,

Mike Siewruk

P.S.  Feel free to pass this along to your trading buddies. Share in the wealth!