Short interest theory

Short Interest Theory
The belief that a large short interest in a particular security means the market price of the security is about to increase because the short positions must eventually be covered, or repurchased.

Short interest theory
The theory that a large interest in short positions in stocks will precede a rise in the market prices, because the short positions must eventually be covered by purchases of the stock.
Short position ...

short interest theory: The theory that large short interest in anticipation of lower stock prices eventually must be covered causing upward price pressure.
short position: The total value of the shares of a stock an investor has shorted.

Short Interest Theory (finance term)
Small Investor (finance term)
Odd Lot (finance term)
Odd-Lot Theory (finance term) ...

Followers of the short interest theory believe an increase in short interest is a bullish signal since the short sellers will eventually need to purchase stock to cover their shorts.

See also: Bear, Hedge Fund, Naked Shorting, Short, Short Covering, Short Interest, Short Interest Ratio, Short Interest Theory, Short Sale Rule, Short Squeeze
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about a particular security, although there are other reasons to short that are not related to pessimism. For example, hedging strategies for mergers and acquisition as well as derivative positions may involve short sales.
Short interest theory ...

See also: Short Sale, Speculator, Custodian, Selling short, Margin account