First, some terminology:
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Short Interest : The number of times shares have been shorted. Notice I didn't say the number of shares. One share can be shorted by multiple people in consecutive trades and short-sales.
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Float Short : Ratio between shorted and available shares.
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Short Ratio : Also know as the time to cover; Equals the number of shorted shares divided by the average volume.
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Borrowing Rate : The cost to borrow shares to short. If the borrowing rate at the end of the day is 50%, the cost of that borrow is .50**(Price of stock at EOD)**(Number of borrowed Shares)/365 This can show how badly shorts are hurting to maintain their positions.
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Available Shares : Should be pretty obvious. The number of shares available to borrow
FREE WEBSITES TO FIND THESE VALUES:
** FinViz Ownership Screener - Shows short float, institutional/insider ownership, and short ratio **
** Shortsqueeze.com - Hosts similar info, but have to check each ticker separately w/ Free version **
** [IBorrowDesk - Great Website, shows borrow rate and available shares data over time] (https://iborrowdesk.com/) **
Why this information is VITAL:
Plenty of bots and shills have been trying to distract with dozens of different tickers that are supposedly experiencing squeezes. It would be incredibly profitable for an institutional investor to borrow millions of shares for a stock with a low borrowing rate and convince morons to buy them. Knowing how short interest and borrowing rates works keeps you from getting screwed. Borrowing rate is especially important here, since even heavily shorted stocks can be profitable plays for shortsellers if there is little cost for them to borrow millions of available shares.
Walkthrough to use this information:
For example, let's check to see if NOK may be experiencing a short squeeze, since it's been pushed so heavily by bots.
1: First, we should check to see if it has a high short interest, and if so, how long that short would take to cover based on average volume.
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From FinViz - Short Interest: 1.1% Short Ratio: .96 days
Greater than 30% Short interest with 10 days to recover is usually the metric used. Based on these metrics, NOK is nowhere near a short squeeze.
2: Next, we should see what the borrowing rate is, as well as the number of available shares.
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From IBorrowDesk - Borrowing Fee: 2.6% Available Shares: 4,100,000
Based on this data, a short-seller could borrow 1000 Nokia shares to sell short for 35 cents a day. In fact, if you compare the available shares with the previous day's available shares 4 MILLION SHARES APPEAR TO HAVE BEEN BORROWED TO SHORT.
At such a low borrowing fee, these shares are extremely cheap to borrow and short. There is no ongoing short squeeze. Short-sellers will likely make a killing on shorting these shares.
Conclusion: Check FinViz to see if a short even exists in the first place. Then check IBorrowDesk to see if easily and cheaply shortable.
Edit: This is not intended to be an anti-NOK post. I like the stock. But it doesn't appear to be squeezy, and with current volatility and retail investment the way it is, NOK could be a target for shortsellers riding the wave.
I'm not a lawyer this is not legal advice. I'm not a dentist and this isn't dental advice. I'm not a financial advisor and this isn't financial advice. I'm high as fuck.
Note : Gamma squeezes are a totally different thing.
TLDR: Shorts do not expire. But if the borrowing rate is really high, they can get expensive to continue holding for shortsellers.
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