Investors in the stock market who are bearish on a particular stock will often times express their opinion by shorting the stock. This is done by borrowing shares of the stock from another investor, selling the stock, and then repurchasing it at a lower price in order to return the shares to the original owner. The difference in price is the profit made from the short sale.
Short interest is simply the total number of shares that have been sold short divided by the outstanding shares of that stock. A high short interest indicates that there are a lot of investors who are bearish on that particular stock.
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