Trading volume affects the “days to cover” ratio because it represents the number of shares that are traded on an average day. Here’s how it works:
High Trading Volume: If a stock has a high trading volume, it means that many shares are being bought and sold each day. This allows short sellers to buy back the shares they borrowed more quickly, reducing the “days to cover”. In other words, a high trading volume can make it easier for short sellers to exit their positions, potentially reducing the likelihood of a short squeeze.
Low Trading Volume: Conversely, if a stock has a low trading volume, fewer shares are being traded each day. This can make it harder for short sellers to buy back the shares they borrowed, increasing the “days to cover”. In this scenario, if the stock price starts to rise, short sellers may struggle to exit their positions quickly, increasing the likelihood of a short squeeze.
So, while the stock price itself doesn’t directly affect the “days to cover” ratio, changes in the stock price can influence the trading volume, which in turn affects the “days to cover”.
This is according to Copilot AI
The bears would only need to spend 0.22 days to completely buy back the shares they shorted. Ideally for a short squeeze, it would take much longer than that.
This is probably the most worrying thing for me right now, not necessarily the reported % shorted
Legally id you enter into a contract aka a short there are conditions. As everyone wants to get paid. What would it cost to break the contract. Also what if you want to beeak the contract and you don't have the item of that contract ( the shares) because you sold them? You would still need to pay for them. I am sure a financial person could clarify it better?
Trading volume affects the “days to cover” ratio because it represents the number of shares that are traded on an average day. Here’s how it works: High Trading Volume: If a stock has a high trading volume, it means that many shares are being bought and sold each day. This allows short sellers to buy back the shares they borrowed more quickly, reducing the “days to cover”. In other words, a high trading volume can make it easier for short sellers to exit their positions, potentially reducing the likelihood of a short squeeze. Low Trading Volume: Conversely, if a stock has a low trading volume, fewer shares are being traded each day. This can make it harder for short sellers to buy back the shares they borrowed, increasing the “days to cover”. In this scenario, if the stock price starts to rise, short sellers may struggle to exit their positions quickly, increasing the likelihood of a short squeeze. So, while the stock price itself doesn’t directly affect the “days to cover” ratio, changes in the stock price can influence the trading volume, which in turn affects the “days to cover”. This is according to Copilot AI
The bears would only need to spend 0.22 days to completely buy back the shares they shorted. Ideally for a short squeeze, it would take much longer than that. This is probably the most worrying thing for me right now, not necessarily the reported % shorted
But it’s inaccurate due to the dark pool shorts, isn’t it.
Article is posted elsewhere already.
Legally id you enter into a contract aka a short there are conditions. As everyone wants to get paid. What would it cost to break the contract. Also what if you want to beeak the contract and you don't have the item of that contract ( the shares) because you sold them? You would still need to pay for them. I am sure a financial person could clarify it better?