“New stock market indicator shows 2015 will be profitable,” an opinion piece by Mark Hulbert on the MarketWatch website credits research by Olin finance professors Matthew Ringgenberg and Guofu Zhou, and their co-author David Rapach, an economics professor at St. Louis University, for developing a new market tool based on short selling.
Hulbert writes, “The new indicator is based on the total amount of short selling in U.S. stocks. (Stock exchanges release information on short selling, which is a way that investors bet on a decline in prices.)
“Short interest is calculated by comparing the percentage of shares outstanding that’s sold short, or how many days a stock’s trading volume that short interest represents.”
Prof. Ringgenberg explains the insight that short sellers have in the marketplace in the video above. Read more research by Prof. Ringgenberg on short selling in Olin Praxis.
graph image: Matthew Ringgenberg
