Robinhood’s short interest rose 26% this week while the stock jumped 22%. Historically, HOOD’s short interest is negatively correlated with price action. This suggests that the recent spike in short positioning could signal a bearish outlook ahead of earnings.

Robinhood (HOOD) has had a large change in short interest this week up +26% and a +22% move for the stock where the average move is only 8%.

The short position is negatively correlated with the stock price which means the shorts are usually right.

The large move up in the short position is historically bearish.

HOOD moves 8% on earnings and is priced to move 11% in the option market.

The graph shows the recent return of HOOD and short position, both up more than 25% in a week.

HOOD had a squeeze in February briefly.

The surge in both price and short interest is a rare occurrence for Robinhood and typically results in bearish post-earnings movement. With option markets pricing in an 11% move and a history of shorts being accurate, the short-term outlook for HOOD remains challenged.

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