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Author: TMFSelena Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2226  
Subject: Re: Days to cover (re: shorts) Date: 3/25/1999 11:07 AM
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"What does 'days to cover' mean re: 'short interest'?"

From the Fool on the Hill discussion on shorting from 10/28/98, Louis Corrigan explains:

<<Squeezes are most likely to occur with stocks susceptible to these supply/demand imbalances. Some numbers worth checking are: 1) the size of the "float" (the number of shares actively traded and not owned by insiders or investors with a greater than 5% stake in the firm) relative to the total number of shares outstanding; 2) the number of shares sold short relative to the float; and 3) the "short interest ratio," or the number of shares short versus the average daily trading volume (usually expressed as the minimum number of days required for all shorts to cover their positions). >>

It's my understanding, therefore, that if Wigs for Pigs (ticker: COIFF) has 50,000,000 shares sold short and its average daily trading volume is 10,000,000 shares per day, its days to cover would be 5.

If I'm wrong, someone please speak up! :)

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