Short Float vs Short Interest: What’s the Difference?
In stock market analysis, two similar-sounding terms often confuse new traders: short float and short interest. While both relate to the amount of short selling in a stock, they measure different things and serve different purposes in evaluating market sentiment and trading risk.
What Is Short Interest?
Short interest refers to the total number of shares of a stock that have been sold short but not yet covered. It’s an absolute figure—typically expressed as a number (e.g., 15 million shares).
- Reported by exchanges: Usually updated twice a month
- Reflects overall bearish bets on a stock
- Can be used to track sentiment over time
What Is Short Float?
Short float is the percentage of a company’s publicly tradable shares (float) that are sold short. It’s calculated as:
Short Float % = (Short Interest / Float) × 100
For example:
- If 10 million shares are shorted out of 50 million float, short float = 20%.
Key Differences: Short Float vs Short Interest
| Metric | Short Float | Short Interest |
|---|---|---|
| Type | Percentage (%) | Raw number (shares) |
| Formula | Short interest ÷ float | Total shares shorted |
| Purpose | Compares shorts to supply | Measures total shorts |
| Volatility Signal | Yes (high % is riskier) | Less actionable on its own |
| Data Usage | Trading strategy, risk | Sentiment tracking |
Why Both Metrics Matter
- Short Float: Helps identify potential for short squeezes and volatility
- Short Interest: Gives insight into how many traders are bearish in absolute terms
Used together, these metrics help build a fuller picture. For example, a stock might have high short interest but low short float if its float is very large (e.g., blue-chip stocks).
When to Use Each
- Use Short Float:
To evaluate trading risk, volatility, and squeeze potential. - Use Short Interest:
To analyze market sentiment trends and identify increasing or decreasing bearishness.
FAQs
Can a stock have high short interest and low short float?
Yes. If the company has a large float, even a high number of shorted shares might not result in a high short float percentage.
Which is more important for trading decisions?
Short float is more relevant for active traders and squeeze-watchers due to its impact on price volatility.
How often are short interest and short float updated?
Typically bi-weekly, but some platforms offer estimates between reporting periods.
Is short float always calculated using float, not total shares?
Yes, short float specifically relates to publicly tradable shares, not total shares outstanding.
Where can I find both metrics together?
Sites like Finviz, Fintel, and Yahoo Finance often list both short float % and total short interest on stock pages.
