Finding Alpha in Short Interest

Insights for Investors

Hi everyone!

I’m excited to share a new article with you, examining the ability of short-interest data to predict returns.

I also want to thank you for your support and enthusiasm for my long-form articles! Your feedback has inspired me to dedicate more time to writing, and I aim to publish at least one high-quality article each week—sometimes more, depending on the depth of the topics I explore.

I hope you continue to find value in my content, and as always, I welcome your feedback and thoughts!

Introduction

This article explores the predictive power of short-interest data, its applications in forecasting individual stock and market returns, and practical insights for investors. I discuss key findings from academic research, explain how short interest is measured, outline where to access the data, and explore its use in portfolio strategies, including long-only and market-timing approaches. The article concludes with actionable tips for integrating short-interest signals into investment decisions.

Table of Contents

• Measuring Short Interest

• Evidence of Predictability

  • Individual Stocks

  • Market Returns

• How To Access Short Interest Data

• Practical Implications For Investors

• References