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Once a week, I like to look at ASIC's short position report to find out which ASX shares are being targeted by short sellers.
That's because I believe it is worth keeping a close eye on short interest levels, as high levels can sometimes indicate that investors have concerns about a company's outlook.
With that in mind, listed below are the 10 most shorted shares on the ASX this week according to ASIC.
The top 10 most shorted ASX shares
- Glencore plc (ASX: GLC) has jumped to the top of the table with short interest surging from 13.4% to 17.9%. The mining giant only joined the ASX last month, and its multiple international listings could mean some of this activity reflects trading and hedging strategies across different markets rather than outright bearish bets.
- DroneShield Ltd (ASX: DRO) has seen its short interest rise slightly to 16.1%. The counter-drone technology company has ambitious growth expectations, but short sellers may be questioning whether its expanding sales pipeline will translate into sustainable earnings. An ongoing ASIC investigation into historical disclosures and share trading could also be contributing to uncertainty.
- Lotus Resources Ltd (ASX: LOT) has short interest of 15.9%, up from 15.8%. The uranium producer recently reported improving recovery rates at its Kayelekera mine in Malawi, but production remains well below its longer-term ambitions. Short sellers may be waiting for evidence that the operation can overcome reliability challenges and achieve consistent commercial production.
- Zip Co Ltd (ASX: ZIP) has seen its short interest jump to 15.7%. The buy now, pay later provider recently reported strong US transaction growth, but also revealed an external fraud incident that added $10.1 million to operating expenses. Rising bad debts and questions about the sustainability of its US growth could be weighing on sentiment.
- PLS Group Ltd (ASX: PLS) has short interest of 15.4%, up sharply from 13.6%. Despite reporting record quarterly lithium production and lower operating costs, the company has committed $1.9 billion to expanding its Pilgangoora operation. Short sellers may be concerned about the risks of such a large investment if lithium prices weaken or global supply increases.
- Boss Energy Ltd (ASX: BOE) has short interest of 15%, broadly unchanged from 14.9% last week. The uranium producer recently reaffirmed its FY 2027 guidance following a solid September quarter. However, investors may still be cautious about whether its revised mining approach at Honeymoon can consistently deliver the production volumes and operating costs outlined in its feasibility study.
- Paladin Energy Ltd (ASX: PDN) has seen its short interest climb to 14.6%. Its latest quarterly update revealed lower uranium production and higher costs at the Langer Heinrich mine. Although the company maintained its annual guidance, short sellers may be concerned about the challenges involved in lifting production and improving profitability.
- IperionX Ltd (ASX: IPX) has short interest of 13.2%, up from 12.5%. The titanium producer recently reported a significant increase in output at its US manufacturing facility. However, short sellers may be questioning how quickly it can expand production, secure substantial commercial orders, and turn its technological progress into meaningful earnings.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest increase from 12% to 12.7%. The rare earths producer is progressing its proposed acquisition of Meteoric Resources Ltd (ASX: MEI), which would add the Caldeira project in Brazil to its portfolio. The investment required to develop this operation, alongside uncertainty surrounding rare earth prices, could be attracting short sellers.
- Electro Optic Systems Holdings Ltd (ASX: EOS) rounds out the top ten with short interest of 11.7%, up from 11.1%. The defence technology company recently secured a conditional $700 million counter-drone contract with Kuwait. While the agreement represents a major opportunity, short sellers may be concerned about the outstanding conditions and the challenges of delivering such a large project.
