What information does the SI metric provide?

What information does the SI metric provide?

• A. The number of shares available for trading
• B. The short interest of a company
• C. The growth rate of stock prices
• D. The investment portfolios of hedge funds

Answer: (B)

The SI metric, or Short Interest metric, specifically reflects the total number of shares of a company's stock that have been sold short but not yet covered or closed out. This figure serves as an important gauge of market sentiment regarding a particular stock; a high short interest may suggest that investors are anticipating a decline in the stock's price, whereas a low short interest can indicate a more bullish outlook. Analyzing the other options provides context for why they are not the right choice. The number of shares available for trading addresses liquidity and float rather than short selling activity. Meanwhile, the growth rate of stock prices pertains to the performance of the stock over time, rather than the mechanics of short selling. Lastly, investment portfolios of hedge funds involve the assets under management and their allocation strategies, which differ significantly from the short interest data that directly concerns the selling of borrowed shares. Thus, the SI metric is distinctly focused on the short interest of a company, making it the correct answer.

The SI metric, or Short Interest metric, specifically reflects the total number of shares of a company's stock that have been sold short but not yet covered or closed out. This figure serves as an important gauge of market sentiment regarding a particular stock; a high short interest may suggest that investors are anticipating a decline in the stock's price, whereas a low short interest can indicate a more bullish outlook.

Analyzing the other options provides context for why they are not the right choice. The number of shares available for trading addresses liquidity and float rather than short selling activity. Meanwhile, the growth rate of stock prices pertains to the performance of the stock over time, rather than the mechanics of short selling. Lastly, investment portfolios of hedge funds involve the assets under management and their allocation strategies, which differ significantly from the short interest data that directly concerns the selling of borrowed shares. Thus, the SI metric is distinctly focused on the short interest of a company, making it the correct answer.