Short Interest by Arthur A. Merrill
ARTICLE SYNOPSIS ...Short Interest
by Arthur A. Merrill
Short interest ? the sale of borrowed stock ? is one of the most useful tools of the technician. Short
sales are made by pessimists, who expect prices to fall. If prices fall, the short seller can buy shares at a
lower price and return the borrowed stock.
Because short sales are made by pessimists, it would seem that a high short interest, displaying a large
number of bearish investors, would be a bearish indicator. No way! A high short interest means that past
sales have been made, future purchases must be made. High short interest, therefore, represents ...