What DIX measures
SqueezeMetrics defines it in one line: "The Dark Index (DIX) is a dollar-weighted measure of the Dark Pool Indicator (DPI) of the S&P 500 components" (>SqueezeMetrics).
In plain terms:
- Dark pool here means trades reported off exchange. SqueezeMetrics uses FINRA's short sale volume files from its Trade Reporting Facilities, which collect data from "exclusively off-exchange, or 'dark,' venues."
- DPI is the share of a stock's off-exchange volume that was marked as a short sale.
- Dollar-weighted means bigger, more heavily traded stocks count for more. The paper explains that "volume is multiplied by share value."
FINRA publishes the raw data. Its short sale volume files cover "off-exchange (OTC) trades in exchange-listed securities reported to a FINRA Trade Reporting Facility" and related facilities (>FINRA).
SqueezeMetrics reads it this way: "When the DIX is higher, market sentiment in dark pools is generally more bullish. When the DIX is lower, it is more bearish or uncertain."
Why short volume can mean buying
This is the part that confuses people. A high share of short sales sounds bearish. The 2018 paper, titled "Short Is Long," argues the opposite.
The reasoning goes like this:
- Market makers fill most retail and institutional orders.
- When an investor buys, the market maker often sells shares it does not own. That sale is reported as "short."
- When an investor sells, the market maker buys. That trade is not reported as short.
So, in the paper's words, "short volume is actually representative of investor buying volume, and non-short volume is representative of investor selling volume." The paper cites the SEC's estimate that short-marked trades are about 49% of equity share volume. Half of all volume being speculative bets against stocks would be hard to believe, and the market-maker explanation fills that gap.
| Investor action | Market maker action | How the sale is reported |
|---|---|---|
| Buys | Sells | Short |
| Sells | Buys | Long (not short) |
Source: SqueezeMetrics, "Short Is Long" (March 2018)
What the 2018 study found
The paper ran two tests.
Test 1: single stocks, same day. Across 11,254 securities and 12.74 million stock-days from 2010 onward, the average open-to-close return was 0.003%. Days with 0–49% dark pool short volume averaged −0.0593%. Days with 50–100% averaged +0.1184%. The paper adds that above about 35% short volume, average intraday returns were "uniformly positive."
Test 2: the S&P 500, two to three months out. This is the DIX result:
| DIX reading | Mean return over next 60 market days |
|---|---|
| 45% or higher | 5.3% |
| Whole dataset | 2.8% |
The math on the gap: 5.3% − 2.8% = 2.5 percentage points. That is roughly 1.9 times the average (5.3 ÷ 2.8 ≈ 1.89).
The paper also observes that "DIX tends to rise into corrections." SqueezeMetrics reads that as investors accumulating S&P 500 stocks at lower prices.
What the study does not tell you
The result is interesting. It is also thin, and the paper is candid about part of that.
- Short history. DIX data starts in 2011. The authors wrote that "it is unfortunate that we have less than 10 years of data to perform these tests."
- No count for the 45% bucket. The paper does not say how many days were at or above 45%, so you cannot judge how many independent episodes sit behind the 5.3%.
- Overlapping windows. Sixty-day returns measured from consecutive days share most of their days. Several readings in one cluster can describe the same rally.
- No significance test is reported. The paper presents averages and a scatter plot.
- Averages hide paths. A 5.3% mean over 60 market days says nothing about the drawdown along the way.
- It depends on market plumbing. The argument rests on how market makers handled orders when the paper was written in March 2018. Later years are outside its tests.
DIX still has value as context about positioning. On its own, it is a weak basis for a trade.
Where to get DIX data
SqueezeMetrics publishes DIX and its GEX reading together on a public monitor page (>SqueezeMetrics). OptionScout's 2026 tools roundup lists SqueezeMetrics as free, with daily updates and historical charts (>OptionScout).
If you want to build your own version, the paper points to FINRA's Reg SHO daily files as the input.
How to use it on the Loomi.Ai Desk
The Loomi.Ai homepage describes the Desk's DIX reading this way: "A lot of big buying happens in private venues you never see on a normal chart. Our dark-pool reading, called DIX, tracks it." The Desk shows it as a DIX tile with a 60-day history line, and the homepage summarizes the same 2018 study figures covered above.
Use it alongside the rest of the Desk:
- Dark pool prints. The Desk also lists individual reported off-exchange trades. Loomi's own description is careful: "The size and timing add context to your research; they do not, by themselves, tell you whether to buy or sell."
- Dealer gamma. The >GEX Regime page shows whether dealers are likely dampening or amplifying moves. A rising DIX during a negative gamma selloff is a different picture from a rising DIX in a calm, positive gamma market.
- Options flow. Check whether large options trades point the same way as the dark pool read.
A reasonable routine: note when DIX moves into the mid-40s, then look for confirmation in trend, gamma and flow before acting on any single name. The Desk is $8/mo intro, then $20/mo.
Put the research to work on your Desk
Explore the tools behind the research, compare the available access, or open your Desk if you already have an account.
FAQ
What does a high DIX mean? A high DIX means a large share of off-exchange volume in S&P 500 stocks was marked short. SqueezeMetrics argues this reflects investor buying, because market makers sell short to fill buy orders.
What is a good DIX level? The 2018 SqueezeMetrics paper singled out 45% or higher. Those readings were followed by a mean 60-market-day return of 5.3%, versus 2.8% for all observations.
Is DIX the same as short interest? No. DIX is built from daily short sale volume in off-exchange trades, as reported to FINRA. Short interest is a separate measure of short positions that remain open.
Is DIX data free? SqueezeMetrics publishes DIX on a public monitor page, and OptionScout's 2026 roundup lists it as free.
Loomi.Ai provides educational market research, not financial advice. Past study results are historical and do not guarantee future returns.
Sources
- >Short Is Long: Using dark pool short sales as a proxy for buying activity, SqueezeMetrics (March 2018)
- >DIX and GEX monitor, SqueezeMetrics
- >Short Sale Volume Data, FINRA
- >Best Gamma Exposure (GEX) Tools in 2026: Free and Paid, OptionScout
- >Loomi.Ai homepage, Loomi.Ai
- >What You Get with Loomi.Ai, Loomi.Ai