Not all traders want shares to go up in value. Some traders will open a short position which bets that a particular share will lose value in the future.

To do this they borrow shares to sell on market with the aim of buying them back at a cheaper price down the line.

It is a risky strategy and has the potential for unlimited losses if investors get it wrong. Because of this short sellers only take positions if they have a high conviction of success. As a result I believe investors should be careful around shares with significant short interest.

According to the most recent data provided by ASIC, these are the 10 most shorted shares on the ASX as of November 21.

  1. Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the ASX. But short interest has dropped since Myer revealed positive same-store sales this month. Short interest sits at 16.8% this week, down from 17.4% last week.
  2. Western Areas Ltd (ASX: WSA) has 14.5% of its shares held short. The nickel producer has seen a slight rise in short interest since this time last week.
  3. Worleyparsons Limited (ASX: WOR) has seen short interest decline slightly to 13.3% this week.
  4. Bellamy’s Australia Ltd (ASX: BAL) is starting to see short interest decline at long last. After peaking at an all-time high of 13.2% last week, the infant formula manufacturer has now seen short interest drop to 12.8%.
  5. Nine Entertainment Co Holdings Ltd (ASX: NEC) continues to be targeted by short sellers. Approximately 12.5% of the media company’s shares are held short.
  6. Aconex Ltd (ASX: ACX) has once again seen short interest jump higher. The software-as-a-service company has 12.4% of its shares held short.
  7. Metcash Limited (ASX: MTS) has 11.6% of its shares in the hands of short sellers. Short interest in the wholesale distributor rose from 10.9% last week.
  8. Monadelphous Group Limited (ASX: MND) is another mining services company under pressure from short sellers. Approximately 10.2% of its shares have been shorted.
  9. TFS Corporation Limited (ASX: TFC) has once again seen short interest hit a new high this year. Short interest in the sandalwood plantation manager has risen to 10.1%.
  10. Alumina Limited (ASX: AWC) has 9.6% of its shares in the hands of short sellers. Pleasingly for shareholders the alumina and bauxite producer continues to see a gradual decline in short interest.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.