The Short Interest Ratio (also known as the Days to Cover ratio) measures the number of days it would take short-sellers to cover (buy back) all their open short positions based on the average daily trading volume of the stock. It is calculated as: Short Interest Ratio = Total Short Interest ÷ Average Daily Trading Volume. A high ratio indicates heavy short selling relative to liquidity, suggesting either strong bearish sentiment or a potential short squeeze opportunity. Investors track this metric to gauge market sentiment and identify stocks susceptible to sharp price reversals.