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Schlumberger’s Short Interest Has Fallen: What Does It Mean?

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Short interest in Schlumberger

Short interest in Schlumberger (SLB) stock as a percentage of its float was ~1.2% on March 3, 2017, a marginal fall compared to December 30, 2016. Since the end of 4Q16, short interest in SLB stock has fallen 4%.

SLB’s stock price and short interest as a percentage of its float have been inversely related for the past two years. Schlumberger makes up 7.5% of the iShares US Energy ETF (IYE). The oil and gas equipment and services industry makes up 15.9% of IYE.

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Short interest and stock price

Short interest is the number of a company’s shares sold short divided by its number of shares outstanding. A fall in short interest as a percentage of float, or a fall in short interest, indicates that fewer investors expect a stock’s price to fall. SLB’s stock price has fallen 4% since December 30, 2016, despite the fall in its short interest.

However, investors should note that the market could go against investors’ sentiments. A share’s price can also rise when investors start buying the stock to cover their short positions. Energy stocks are typically correlated with crude oil prices. What’s SLB’s correlation with crude oil? Let’s find out in the following article.

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