What Is Short Interest and Why Does It Matter to Investors?

By Matthew Frankel, CFP – Updated Aug 15, 2025 at 3:18 AM EST

Key Points

Short interest is the percentage of a stock's available shares currently sold short.
High short interest, often above 10% of the stock's float, indicates negative investor sentiment.
A high short interest can lead to a short squeeze, abruptly driving up stock prices.

Short interest is an important concept for investors to understand since it can be a driving force behind market movements. For example, the notable GameStop (GME -0.24%) spike a few years ago wouldn't have been possible if the stock didn't have a high short interest.

With that in mind, here's a breakdown of short interest, a few examples of stocks with high short interest, and why it's so important for investors to know about short interest.

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Person looking at a declining bar chart drawn on a wall. — Image source: Getty Images.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst specializing in the real estate and financial sectors. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, Globe St, The National Desk, and other TV networks and publications for his real estate, financial, stock market, and investing expertise.

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Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.