May 11, 2021 8:00 AM newsfeedback@fool.com (FINRA Staff) Posted: Updated: What is short interest? To understand what short interest is, we should first talk about short sales. Put simply, a short sale involves the sale of a stock an investor does not own. When an investor engages in short selling, two things can happen. If the price of the stock drops, the short seller can buy the stock at the lower price and make a profit. If the price of the stock rises, the short seller will lose money. An investor may engage in short selling for many reasons, such as to profit from a decline in the price of a stock or to hedge the risk of other positions.