Days to Cover
Short interest divided by average daily volume. Estimates how many trading days it would take all short sellers to buy back their shares.
Formula
Days to Cover = Short Interest ÷ Average Daily Volume
Days to cover (also called the short ratio) measures how long it would take — at normal trading volume — for every short seller to close their position. A high days-to-cover number means shorts are deeply entrenched relative to daily liquidity.
A days-to-cover above 5–10 days is considered elevated. In a squeeze scenario, shorts trying to cover into rising prices amplify the upward move, because they are competing with buyers for the same limited shares.
Days to cover is more informative than raw short interest because it normalizes for trading activity. A stock with 10 million shares short and 5 million average daily volume (2 days) is less squeezable than one with 10 million short and 500,000 daily volume (20 days).
Related Terms
Float
The number of shares freely available for public trading, excluding insider-held and restricted shares.
IntermediateShort Interest
The total number of shares currently sold short and not yet covered. Reported bi-weekly; high short interest can signal a crowded bet or squeeze risk.
IntermediateShort Selling
Borrowing shares and selling them, hoping to buy them back cheaper later. Profit = sell price minus buy-back price.
IntermediateShort Squeeze
A rapid price surge that forces short sellers to cover at a loss, which drives the price even higher in a self-reinforcing feedback loop.
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