A high amount of short interest is typically considered as a ________ signal, and contrarians may consider it as a ________ signal.
A) bearish; bullish
B) bullish; bearish
C) bearish; false
D) bullish; false

Question

Quizplus · Accepted Answer

A high amount of short interest is typically considered as a bearish signal because it suggests that investors are betting against the stock's price. However, contrarians may consider it as a bullish signal because if the stock price begins to rise, short sellers will have to buy shares to cover their position, leading to a potential short squeeze and further price increase.

A High Amount of Short Interest Is Typically Considered as a ________