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Views 22KMay 16, 2024

How to Use Short Sale Analysis

How to Interpret Short Sale Data

Short sale data indicates market sentiment and tracks price trends.

Investors with a long position can track short sale data with the hopes of avoiding stocks that might move downward.

Short-sellers can focus on stocks with a high short sale volume to potentially find investment opportunities.

Note: Any app images provided in the content are not current, and any securities shown are for illustrative purposes only and are not a recommendation.

How to Access Short Sale Analysis

1. Tap a stock and enter its Detailed Quotes, tap Chart.

2. Scroll down to see Short Sale Analysis.

3. Long press to display the details and drag the chart to view the data of different dates.

The content shown in the images is not the latest information. Securities mentioned are used for ill
The content shown in the images is not the latest information. Securities mentioned are used for ill

Tap Short Sale Ranking to view the lists.

The content shown in the images is not the latest information. Securities mentioned are used for ill
The content shown in the images is not the latest information. Securities mentioned are used for ill

How to Analyze Short Sale Data

Daily Short Volume - Help speculate on future trends

Main Indicators:

1. Daily Short Volume: number of shares traded short of the trading day on the market (updated every day).

2. Short Interest Ratio = Short Interest / Average Daily Trading Volume


Let's take Tesla stock as an example. It closed at $303.35 on September 16, 2022, with a peaked daily short volume.

Then, as we can see below, the stock continued to fall and dropped to $216.5 on October 11, 2022.

How to Use Short Sale Analysis -1


We can conclude from the example that short volume reflects, to some extent, investors' expectations of future trends.

If the short volume has a sharp increase, the stock price might be more likely to fall in the short term.

Short Interest - Determine market sentiment

Main Indicators:

Short Interest Volume: the number of short shares that have not closed to date (updated every two weeks).

Short Interest Ratio = Short Interest Volume / Total Equity

Days to Cover = Short Interest Volume / 30-day Average Daily Volume


Let's get back to the example of Tesla. The short interest ratio of Tesla decreased sharply from June 15 to August 15, 2022, while the price rose from $232.998 to $309.317.

However, when the short interest ratio reversed and went higher, the stock price showed a downward trend.

On January 13, 2023, Tesla hit 52 weeks low, while the short interest ratio surged to its peak.

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Generally, the higher the short interest volume, the more likely the stock price may fall.

Conversely, a significant decline in the short interest volume may indicate a potential price rise, resulting from either short-sellers buying back the shares to close their positions or the bullish market sentiment.

Although the stock price and the short interest ratio are negatively correlated, remember it's not always the case, and other indicators should be considered when forecasting trends.

Short Sale Rankings - Spot potential investment opportunities

Tap Short Sale Rankings to view the short sales list and find potential investment opportunities.

1. Tap Filter in the upper right corner to change the settings.

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Unusual Short Sales, Short Volume, and Short Ratio are updated daily.

Average Short Volume and Average Short Ratio are the average data for the last week or month.

You can also choose to display Short Interest (volume), and Short Interest (%).

2. You can change the date and switch between ascending and descending orders.

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How to short a stock?

1. First, open a margin account.

Once you open a margin account, tap [Trade] and select [Sell]. If you do not have a long position, tapping the Sell button directly will be considered short selling.

How to Use Short Sale Analysis -5

Reminder: Short selling is an act of borrowing and selling stocks. Please note that risk management is needed as users holding short positions may be forced to liquidate without prior notice. When short selling, there is no limit on how high a stock price could rise, so the potential loss is unlimited. Other risks include dividend risk and margin risk, this strategy is not appropriate for all investors.

2. Short selling requires margin and additional fees, which could vary as daily market supply changes.

On the Detailed Quotes page, you can view whether the stock is shortable and its margin requirements.

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Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy.

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