Whilst the majority of investors are focused on buying shares which they believe will go up in value, there are investors out there doing the very opposite.
Short sellers will take short positions by borrowing shares to sell on market in the hope of buying them back at a cheaper price in the future.
Here are the 10 most shorted shares on the ASX this week according to data provided by ASIC:
- Syrah Resources Ltd (ASX: SYR) continues to be the most shorted share on the ASX with 18.8% of its shares held short. Despite the high level of short interest, the graphite miner's shares are up 45% in the last six months.
- Independence Group NL (ASX: IGO) has seen its short interest rise once again, this time to 18.4%. Short sellers may be bearish on the gold miner due to the prospect of rising rates in the United States.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has seen short interest rise sharply to 15.3%. The pizza operator's shares have not let this hold them back, though. They rose almost 9% last week.
- JB Hi-Fi Limited (ASX: JBH) has short interest of 14.8%. Short sellers are likely to be bearish on the retailer due to the impending launch of Amazon in Australia. I wouldn't be a buyer of its shares at this point.
- Western Areas Ltd (ASX: WSA) has seen its short interest slide to 14.4%. Rebounding nickel prices appear to have been the reason for the fall in short interest.
- Orocobre Limited (ASX: ORE) continues to see its short interest slide, this time to 14.2%. Short sellers appear to be closing their positions due to the increasingly bullish outlook for global lithium demand.
- Retail Food Group Limited (ASX: RFG) has 13.2% of its shares held short. While the food and beverage company's performance has disappointed of late, I feel its shares could be classed as being very cheap now.
- Healthscope Ltd (ASX: HSO) has short interest of 13.1%. Short sellers continue to increase their exposure to the healthcare company after its dividend cut and forecast for flat EBITDA in FY 2018.
- Myer Holdings Ltd (ASX: MYR) has 12% of its shares held short. Short interest has continued to slide since Solomon Lew requested access to the share registry.
- Select Harvests Limited (ASX: SHV) has 11.7% of its shares held short. The almond producer was the subject to a takeover offer last week, which could be hurting short sellers.
