Apple short interest spiked on Feb. 28, 2019

It was as high on the last day of February as it’s been since 2016. What was that about?


From friend-of-the-blog Kathy Corby, who spotted it three days ago:

Some interesting info on the NASDAQ site about recent changes in AAPL short interest. (Google it.) In a nutshell, on 2/28, AAPL short interest was higher than at any other time this past year, including during the October to December swoon. (96.8 shares, 4.38 days to cover.) It has since decreased (1.93 days to cover) but remains higher than at any other month besides March. No statistics are available after 3/31 as yet.

The point is: Short interest may reflect negative sentiment, but it also can add rocket fuel to a rally, as shorts surrender and race to cover. Let’s be grateful to the shorts—they have our best interests in mind. That said, it is unlikely we will see short covering prior to earnings, and may see a swoon in price as AAPL likely must curtail its buybacks, but if earnings are better than expected, watch out above!

From Investopedia: Short interest is the number of shares that have been sold short but have not yet been covered or closed out. Short interest, which can be expressed as a number or percentage, is an indicator of market sentiment. Extremely high short interest shows investors are very pessimistic, potentially over-pessimistic (emphasis mine)