Days to Cover
Short Interest divided by Average Daily Volume -- an estimate of how many trading days short-sellers would need to buy back all their shares if forced to cover at typical volume. Days to Cover above 5 is considered high; above 10 is squeeze territory. The 2021 GameStop squeeze had Days to Cover near 20 before retail capital concentrated the buy-side. The metric assumes volume holds at the average -- volume usually spikes during a covering event, so the actual squeeze unwinds faster than the raw ratio implies.
Why it matters
Measures how long it would take all short sellers to buy back their shares. Higher values mean shorts are more "trapped" — if the price rises, they can't exit quickly, potentially fueling a squeeze.
How to read it
Below 2 days: shorts can exit easily. 2-5 days: moderate. Above 5 days: shorts are potentially trapped. Above 10 days: extreme squeeze risk if a positive catalyst occurs.
Lessons that use this term
Related terms
Active Management · Active Share · AI Revenue · Anchoring Bias · Cost of Capital · Creation Unit
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