Retail Food Group Limited shares surge 11% higher

One of the best performers on the local share market on Wednesday has been the Retail Food Group Limited (ASX: RFG) share price.

In afternoon trade the embattled food and beverage company’s shares are up over 11% to $1.04.

Why are they climbing higher?

With no news out of the company or broker notes to speak of, today’s push higher could be due to short sellers closing positions.

In order to close a short position, a short seller must buy back however many shares they short sold.

This can often lead to a sudden rise, or short squeeze, in the price of a heavily shorted share.

The most recent data from ASIC reveals that Retail Food Group has over 11.1% of its shares in the hands of short sellers.

This makes it the tenth most shorted share on the ASX behind Myer Holdings Ltd (ASX: MYR) in ninth position and ahead of Mayne Pharma Group Ltd (ASX: MYX) in eleventh position.

Syrah Resources Ltd (ASX: SYR) continues to lead the way with a massive 21.4% of its shares held short.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Scott Phillips.

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