(AAL) - American Airlines Group Inc's Short Interest Up 36%

American Airlines Group Inc's AAL short interest has increased 36% since the last report. The company recently reported that it has 98 million shares sold short, which is 15.44% of its float, the amount of regular shares that are available to investors for trading. With its current trading volume, it would take traders 2.9 days to cover their short positions on average.

Why it matters: Short interest is the number of shares that have been sold short but have not yet been covered or closed out. Traders make money from a short position if the price of the stock falls and they lose if it rises. For these reasons, short interest can be used as an indicator of market sentiment for a stock. If the number of shares sold short increases, this can mean that the market is developing a more bearish outlook on the stock and if they decrease this can mean the market is more bullish.

Sometimes, a large amount of short interest can be bullish for a stock. If short interest rises too high and trading volume falls too low, this will make it hard for short sellers to buy back their shares on the open market. If the price of the stock starts to go up, this could cause short sellers to panic and rush to buy back the shares they sold short (close their positions). This buying pressure can make the price rise and create a vicious cycle of more short sellers buying back shares. This is called a short squeeze.

This post by Benzinga Money shows how to make money on a short squeeze.

Considering American Airlines Group Inc's current short interest and days-to-cover, it's not likely to experience a short squeeze in the near-term. However, with this recent climb in short interest, it at least shows that more traders are short the stock and this could be bearish for the stock.

Follow the most shorted stocks here.

This article was generated by Benzinga's automated content engine and was reviewed by an editor.