Short interest ratio
Hey there champ, have you ever borrowed a toy or a book from a friend and promised to give it back later? That's kind of like what happens when people borrow stocks from someone else. When someone borrows a stock, they hope that the price of the stock will go down so that they can buy it back at a lower price and make a profit.
The short interest ratio is a way to measure how many people are borrowing stocks and hoping that the price will go down. To calculate it, we take the number of shares that people have borrowed and divide it by the total number of shares available to trade.
For example, let's say there are 100 shares of a company that can be traded, but 10 people have borrowed some of those shares. The short interest ratio would be 10 divided by 100, which equals 0.1.
A high short interest ratio means that a lot of people are expecting the price of the stock to go down. That could mean that they have heard bad news about the company or that they think the market as a whole is going to go down.
It's important to note that shorting stocks can be risky because if the price of the stock goes up instead of down, the people who borrowed the stock will have to buy it back at a higher price than they sold it for, and they will lose money.
So, in summary, the short interest ratio is a way to measure how many people are borrowing stocks and hoping the price will go down. A high ratio means that many people are expecting the price to drop.
The short interest ratio is a way to measure how many people are borrowing stocks and hoping that the price will go down. To calculate it, we take the number of shares that people have borrowed and divide it by the total number of shares available to trade.
For example, let's say there are 100 shares of a company that can be traded, but 10 people have borrowed some of those shares. The short interest ratio would be 10 divided by 100, which equals 0.1.
A high short interest ratio means that a lot of people are expecting the price of the stock to go down. That could mean that they have heard bad news about the company or that they think the market as a whole is going to go down.
It's important to note that shorting stocks can be risky because if the price of the stock goes up instead of down, the people who borrowed the stock will have to buy it back at a higher price than they sold it for, and they will lose money.
So, in summary, the short interest ratio is a way to measure how many people are borrowing stocks and hoping the price will go down. A high ratio means that many people are expecting the price to drop.