Shares out, short interest and the squeeze score

Low supply, heavy demand and trapped shorts are what make a small cap move several dollars in minutes. Three columns on every scan panel measure them: SHS OUT, SHORT and SQZ. This guide explains where each number comes from, how old it can be, why Scalpel shows shares outstanding rather than float, and exactly how the squeeze score is put together, with a worked example.

Float vs shares outstanding

Shares outstanding is every share the company has issued. The float is the part the public can actually trade: shares outstanding minus those held by insiders, large owners and restricted holders. The float is always the smaller number, often much smaller.

Momentum traders care about the float, because a small float means few shares for sale when buyers rush in. Scalpel shows shares outstanding because that is what it can get honestly, for free:

• IBKR's API has no float field, and its scanner refuses float as a filter.
• Reliable float data is a paid third-party feed. Scalpel is built to run on what you already have through Interactive Brokers, plus free public sources.
• Shares outstanding is reported by every listed company in its SEC filings, and Scalpel reads it from SEC EDGAR at no cost.

Because shares outstanding is never below the float, it works as a ceiling:

MKT CAP is the last price times shares outstanding, so it needs the same data and moves with the price.

Short interest and days to cover

The SHORT column reads like 18% 3.4d:

• 18% is short interest: the shares sold short, as a percent of shares outstanding.
• 3.4d is days to cover: the short position divided by the average daily volume, the number of days of normal trading it would take the shorts to buy back.

The numbers come from FINRA's consolidated short interest, which is free. Brokers report it twice a month, for the 15th and the last trading day of the month, and FINRA publishes it about a week later. So the reading can be up to three weeks old. Scalpel checks each watched symbol once a day and keeps the newest report from the last 75 days.

Two things to keep in mind:

• It is a percent of shares out, not of the float. With a float smaller than shares out, the real percent of the float is higher than the column says.
• It is slow. Short interest tells you how crowded the short side was at the last report. For what shorts can do right now, read the live borrow chips (guide 9.3).

If only the days show (for example 2.1d), FINRA has a reading but the share count is missing, so there is no percent. A dash means FINRA has no recent reading, which is common for brand-new listings.

The squeeze score (SQZ)

SQZ answers one question: how built is this stock to squeeze? It is a 0 to 100 score on a violet cell that glows brighter as the score rises. Hover it to see why.

What goes into it

Supply and market cap are scored on a log scale, so the step from 2M to 4M shares matters far more than from 40M to 42M.

The score averages only the ingredients Scalpel knows. A missing reading (no FINRA report, no borrow data yet) drops out instead of counting as zero, so a fresh listing is not punished for missing paperwork.

The dilution cut

New stock for sale kills squeezes, because every spike has a seller waiting. After the fuel is scored, dilution cuts it:

Reading it

Worked example

WXYZ trades at $4.20, up 38% on contract news. It has 3.0M shares outstanding, 600,000 shares sold short (20% of shares out, 2.5 days to cover), is trading 12 times its normal volume, nobody can borrow it to short (a borrow score of 80), and it has no dilution flags. Its market cap is 3.0M x $4.20 = $12.6M.

(The supply part is 17.98, so the exact total is 81.48 and the panel shows 81.)

IBKR scanner 2LIVE

RANKSYMPRICECHG%VWAPINTELSQZRVOLSHS OUTSHORTMKT CAPVOLDESK

1WXYZ4.20+38.2%Deal 25mCan't short8112.0x3.0M20% 2.5d$12.6M7.5M

2XYZA0.62+18.9%Dilution216.1x152.0M3% 0.4d$94.2M63.5M

Built to squeezeTight supply, heavy demand and little new stock coming. It can move fast if buyers step in.

Volume 12x normalFew shares out: 3.0M sharesShorts trapped (borrow pressure 80)20% of shares out sold shortSmall company ($12.6M market cap)Shorts need 2.5 days to buy backSqueeze score 81 of 100

Now suppose WXYZ files to sell stock and its dilution read goes to high: 81.48 x 0.75 = 61, Some squeeze fuel, and the card's first line reads "High dilution risk: score cut by a quarter". If it prices an offering, the read goes to severe and the score halves to 41.

Questions

Why does Scalpel show shares outstanding instead of float?

IBKR's API does not supply float and its scanner refuses it as a filter, and reliable float data is a paid feed. Shares outstanding comes free from SEC filings and is never below the float, so a small number is a sure low float.

Is a low shares outstanding the same as a low float?

A low shares outstanding guarantees a low float, because the float is always smaller. A high shares outstanding does not rule out a low float: insiders may hold most of the shares.

How old is the short interest in the SHORT column?

Up to about three weeks. FINRA collects it for the 15th and the end of each month and publishes it about a week later. Scalpel checks once a day per symbol.

Why did the squeeze score change when the price did not?

Relative volume keeps rising through the day, the live borrow read changes as shorts use up the available shares, and a new financing filing cuts the score. Any of these moves SQZ without a price change.

What is a good squeeze score?

70 and up reads as built to squeeze, 40 to 69 as some squeeze fuel, under 40 as not a squeeze setup. It ranks structure only: it does not predict direction.

Why does the SHORT column show only days, like 2.1d?

FINRA has a short interest reading, but Scalpel has no share count to turn it into a percent. Set the SEC contact email in Settings > Intel, and check the symbol is within the 40 that intel follows.