Track SEC settlement-fail data to flag stocks under short-covering pressure, using Fails-to-Deliver volume and Reg SHO threshold status as a proxy for squeeze risk
Answers which stocks show signs of heavy settlement pressure, using a public settlement-data proxy rather than official short-interest figures (real exchange short interest isn't available to us). It reads SEC Fails-to-Deliver volume as a share of float and shares outstanding, and Reg SHO regulatory-threshold status, and computes a settlement-pressure score that only reads high when the pressure persists across multiple settlement cycles. Use it to spot names under sustained settlement stress, keeping in mind this reflects delivery failures, not confirmed short positions, and can be dominated by routine market-maker mechanics.
Fails-to-deliver as a short-interest proxy - honestly labelled as a proxy, and worth understanding precisely because the substitution is a large one.
WHAT SHORT INTEREST ACTUALLY IS. Shares sold short and not yet covered. In the US it is reported to FINRA by member firms on a scheduled basis and published with a lag, which is the authoritative measure. This analysis does not have it, and uses public SEC settlement data instead.
WHAT A FAIL-TO-DELIVER IS, and it is a different object. A trade settles when shares and cash change hands. A FAIL is a transaction where the seller did not deliver by settlement. It is a SETTLEMENT event, not a positioning measure, and it can arise from causes having nothing to do with short selling: operational and clerical errors, a long seller whose shares were not in place, delays in a transfer agent, and market-maker activity where bona fide market making has historically carried different treatment. Naked short selling can also produce fails, which is the association behind using them as a proxy - but the mapping is loose in both directions, and the empirical relationship between fails and short interest is much weaker than the substitution implies.
REG SHO AND THE THRESHOLD LIST are the precise part and worth learning. Regulation SHO governs short sales and settlement. A security lands on the THRESHOLD LIST when fails reach at least 10,000 shares AND at least 0.5% of shares outstanding, for five consecutive settlement days. Those are bright-line, published criteria - so threshold membership is a FACT about a security rather than an estimate, which makes it the more solid of the two inputs here.
WHY THIS MATTERS FOR THE READING. Fails as a share of float is a continuous estimate standing in for something it is not; threshold membership is a categorical fact meeting a published test. Weight them accordingly.
THE SQUEEZE STORY, and its limits. The mechanism is real: a heavily shorted stock rising forces shorts to buy to cover, and that buying pushes it higher. What makes it hard to use is that short interest is a LEVEL, not a trigger - high short interest can persist for years, sophisticated shorts may be hedged, and short sellers have historically been informed on average, so heavy shorting is at least as often a signal about the company as a setup against it.
DAYS-TO-COVER (short interest over average daily volume) is the standard companion measure and is not available here for the same reason the underlying figure is not.
The settlement-pressure score and its bands are our own convention, and this is a proxy stated as one: no level, low or high, says whether short sellers will be forced to buy.
Published reports are readable without an account. The newest is Ether (ETH) and XRP extend a month-long slide as Bitcoin falls below $75,000: trend, momentum and news (Nov 9, 2026). Create an account to run research on the stocks and crypto you choose.