Short sellers. Love them or hate them, they're a big part of today's markets and the pricing of ASX shares.
These investors had a field day in March as the S&P/ASX 200 Index (ASX: XJO) plunged lower into a deep bear market.
After being scared off in recent months by the recovering market, short sellers are back. Here are some of the most shorted ASX shares as a percentage of their tradeable shares.
1. Myer Holdings Ltd (ASX: MYR)
According to ASIC's short position reports, Myer is one of the most-shorted ASX shares right now.
Myer currently has 99.1 million short positions against it or 12.1% of total shares on issue. That means there are plenty of investors betting on a Myer share price fall in 2020.
There's no doubt conditions are challenging for some Aussie retailers right now. Myer is starting to reopen its stores which could help sales but there are persistent headwinds.
The company's debt and liquidity also have many investors betting against the ASX retail share. The recent withdrawal of trade credit insurer QBE Insurance Group Ltd (ASX: QBE) also doesn't send a strong signal to stakeholders in the market.
2. Webjet Limited (ASX: WEB)
There are perhaps no surprises with this one. The Webjet share price has been smashed in 2020 and is down 68.2% for the year.
ASX travel shares have been hit particularly hard by the coronavirus pandemic. With no recovery for international tourism in the foreseeable future, the Webjet share price could remain under pressure for some time.
That's certainly the view of the short sellers in the market right now. According to the latest ASIC report, there are 34.0 million short positions or 10.0% of total shares on issue for Webjet.
3. Zip Co Ltd (ASX: Z1P)
The Zip Co share price has been one of the big success stories of 2020. The buy now, pay later share is up 83.9% this year and 451.7% since 19 March.
However, that strong share price growth has drawn the attention of short sellers. ASIC has reported 27.8 million short positions or 7.1% of its total shares.
Buy now, pay later ASX shares have been among the strongest performers in 2020. Many believe the sector has turned into a 'bubble' and is now detached from reality.
Time will tell which camp is right, but short sellers appear to be putting their money where their mouths are.
Foolish takeaway
As the share market rises, short sellers appear to be getting more confident in their short positions. No one knows who will be right when it's all said and done but it's worth watching the ASX shares that short sellers are betting against right now.
