Alcoa’s short positions
Before we analyze Alcoa’s (AA) short positions, let’s first discuss a few key terms. Short interest tells us the number of shares that have been short sold. Exchanges release the short interest every two weeks. Short interest indicates the general market mood in regards to a particular security.
From the short interest, we derive the short interest ratio, which is just short interest divided by average daily traded volume. The short interest ratio and the short interest to market capitalization ratio basically standardize the short interest. It’s natural that larger and more liquid companies can have high absolute short interest. Therefore, we standardize short interest to the market capitalization or the trading volumes.
Short interest ratio
The graph above shows Alcoa’s short interest ratio plotted against its stock price. According to the latest update as of May 31, 2016, Alcoa’s short interest ratio stood at 6.33. The ratio has increased from the previous update when Alcoa’s short interest ratio was 5.43 on May 13. Currently, Alcoa’s short interest ratio is the highest since December 31, 2015.