Does "High short interest leads to a short squeeze" Work? 4,283 Signals Tested

A large short position is often thought to create buying pressure if short sellers cover together.

Result

No difference — The test did not establish a difference from the matched baseline.

As of 2026-09-29 · Observed period 2025-09-29 to 2026-09-29

Source: FINRA Equity Short Interest and daily price records

An event is a FINRA short-interest report with days-to-cover of 10 or more and average daily volume of at least 100,000 shares.

A large short position is often thought to create buying pressure if short sellers cover together.

Regime	Cases	Observed	Expected	Verdict
Neutral	982	40.4%	42.2%	Not enough data
Risk-off	327	71.3%	70.5%	Not enough data
Risk-on	2,974	47.8%	48.8%	Not enough data

Definition: An event is a FINRA short-interest report with days-to-cover of 10 or more and average daily volume of at least 100,000 shares.

Historical outcomes only. The sample may reflect a limited market regime. Results do not account for stops, position sizing, fees, or taxes.

Past data · not investment advice