DTC
Filter
Days To Cover Filter (DTC)
Find stocks with heavy short interest, measured in days to cover, in real time, with Trade Ideas Streaming Alerts (Scanner) and Top Lists (Screeners). Days to cover estimates how many days of average volume it would take short sellers to buy back their shares. Higher values mean more short interest relative to trading.
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Seeing a heavily shorted stock start to squeeze as it happens helps active traders. The Days to Cover filter value changes once a day, so Streaming Alerts apply it the moment each alert fires: you see only the stocks that pass it, while they are moving.
How Trade Ideas finds it: adjust the minimum value to 5 to see only stocks with a higher short interest. Adjust the maximum value to 1 to see only stocks with relatively lower short interest. See Trade Ideas plans and pricing to run it live.
How the Days To Cover filter works
Key point
The "days to cover" filter in stock trading is a metric used to assess the level of short interest in a particular stock. Short interest refers to the number of shares of a security that have been sold short by investors but have not yet been covered or closed out. The "days to cover" ratio indicates how many days it would take for short sellers to cover their positions based on the average daily trading volume of the stock.
Here's a breakdown of how the days to cover filter works:
Calculation: The days to cover ratio is calculated by dividing the total number of shares sold short (short interest) by the average daily trading volume of the stock.
Interpretation: A higher number means that the market has a bearish sentiment about this stock. A lower number is more bullish.
Days To Cover filter settings
Settings
Configuring the "Days to Cover" filter is simple and can be done within the Window Specific Filters Tab of the Configuration Window in your Alert or Top List (Screener) window.
Here's how to set up the filter in your configuration window:
- Adjust the minimum value to 5 to see only stocks with a higher short interest.
- Adjust the maximum value to 1 to see only stocks with relatively lower short interest.
Using the Days to Cover Filter
The "Days to Cover" filter can be used in various trading strategies, including:
- Short Squeeze Identification: A high days to cover ratio may indicate a high level of short interest in a stock. Traders might look for stocks with a days to cover ratio above a certain threshold, suggesting the potential for a short squeeze if positive news triggers a rapid price increase, forcing short sellers to cover their positions.
- Contrarian Strategy: Conversely, a low days to cover ratio may suggest low short interest in a stock. Traders might interpret this as a bullish signal, as there are fewer short sellers to push the stock price down. They may consider taking long positions in anticipation of potential price appreciation.
- Confirmation Tool: Traders may use the days to cover ratio as a confirmation tool in conjunction with other technical or fundamental indicators. For example, they might look for stocks with a high days to cover ratio that are also showing signs of bullish price action or positive fundamental developments, reinforcing their bullish bias.
Filters to combine with Days To Cover
Categories
FAQ
Which stocks have the highest days to cover?
Add the Days To Cover filter (DTC) to a Trade Ideas Streaming Alerts or Top List (Screener) window. Adjust the minimum value to 5 to see only stocks with a higher short interest. Adjust the maximum value to 1 to see only stocks with relatively lower short interest.
What is the Days to Cover filter?
Days to cover estimates how many days of average volume it would take short sellers to buy back their shares. Higher values mean more short interest relative to trading.
How do I find short squeeze candidates?
Use the Days To Cover filter (DTC) in Trade Ideas Streaming Alerts and Top Lists to find stocks with heavy short interest, measured in days to cover. Days to cover estimates how many days of average volume it would take short sellers to buy back their shares.