Short Interest Data
Top Short Interest Data APIs, Datasets, and Databases
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The Ultimate Guide to Short Interest Data 2020
Learn everything about Short Interest Data. Understand data sources, popular use cases, and data quality.
Table of Contents
What is Short Interest Data?
On the stock market, investors who wish to have an overview of the overall market sentiment may make use of short interest data. This data shows an account of the number of securities that have been borrowed and sold but have not been bought back to close an open position for profit or loss. This data, which is often expressed as a percentage, is used to gauge the level of optimism or pessimism of traders on the securities exchange market. High short interest data is an indicator that investors have become more cautious, while a low short interest data shows that they have become more confident.
How is Short Interest Data collected?
Short interest data is compiled monthly by the securities exchange markets such as NYSE and NASDAQ. The collection of this data is based on short positions held as settlements on the 15th of each month and the data made publicly available a few days later. Short interest data is adapted into a ratio referred to as days-to-cover ratio by taking the number of short shares and dividing it by the average daily trading volume for a given stock trading market. Short interest data can be an indicator of individual stocks or stocks as a whole. In gauging an entire stock market, a stock trader can analyze the days-to-cover of all the stocks on the market by taking the cumulative short interest divided by the average daily stock market trading volume.
What are the attributes of Short Interest Data?
The core attribute of short interest data is that it gives traders on the security trading markets the ability to forecast future news concerning a given stock or a firm. Another attribute is the ability of this data to show the changeable nature of market sentiments. It gives an overview of the extreme ends of a given stock market trend.
What is Short Interest Data used for?
Short interest data can provide an in-depth view of the probable direction of an individual or group of stocks. In this regard, this data also paints a clear picture of how cautious or confident investors are in a given stock exchange. The high percentage value of short interest data may serve as an indicator of the pessimistic nature of traders on a stock trading platform, while low short interest data percentage is an indicator of how optimistic traders appear. When converted into a ratio referred to as days-to-cover, short interest data to assess the number of that it will take for the shorts to be able to cover their positions. This data can also be used by investors to assess the general outlook of an entire stock market when an investor looks at the days-to-cover value.
How can a user assess the quality of Short Interest Data?
A user can assess the quality of short interest data by evaluating the validity period of the provided. Stock markets such as NYSE and NASDAQ provide this data at least once in a month. For this reason, it would not be viable for an interested investor to analyse data that is more than one month old if they are looking for have a realistic overview of current market sentiment. Considering the fragile nature of stock markets and how a minute can change the entire overview of an individual stock, it wouldn’t be helpful to use data that is too old and does not provide up-to-date information on the stock market.