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Short and Caught: Which lithium play remains the ASX’s most-shorted stock?
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- Yep, you guessed right. Pilbara Minerals is still the most-shorted ASX stock, despite lithium prices trending back up just recently
- Uranium plays Boss Energy, Paladin Energy and Deep Yellow also remain a target of short sellers
- Short positions in consumer discretionary stocks suggest investor caution around consumer spending
Before we delve into the ASX’s most shorted, just a quick reminder right off the bat here about what short selling actually is.
Short sellers effectively borrow a stock from a broker, and go wager it (sell it) on the open market. The plan is to then buy the same stock back later after it’s made a hefty drop in price. That done, the short seller buys it back at the lower price and returns it to the lender.
The difference between the sell price and the buy price is the short seller’s profit. Investors are in effect betting they will fall.
Because shorting is restricted under Australian law (and because it’s an all or nothing bloodsport) any substantial shorting of stocks is worth knowing about, even if you only trade long.
And perhaps there’s method in the madness.
Stockhead has utilised the number of short positions as a percentage (5% or more) of total shares on issue according to ASIC’s Short Position Report.
The most-shorted stocks on the ASX
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Short positions | Shares on issue | % short positions |
|---|---|---|---|---|
| PLS | PILBARA MINERALS | 523,390,114 | 3,011,484,916 | 17% |
| BOE | BOSS ENERGY | 61,348,586 | 409,688,058 | 15% |
| IEL | IDP EDUCATION | 40,145,281 | 278,336,211 | 14% |
| PDN | PALADIN ENERGY | 43,099,890 | 299,113,022 | 14% |
| SYR | SYRAH RESOURCES | 137,320,763 | 1,034,891,766 | 13% |
| MIN | MINERAL RESOURCES. | 20,756,242 | 196,518,604 | 11% |
| DMP | DOMINO PIZZA ENTERPRISES | 9,042,677 | 92,459,635 | 10% |
| DYL | DEEP YELLOW | 94,420,603 | 969,741,926 | 10% |
| LYC | LYNAS RARE EARTHS | 87,225,487 | 934,718,185 | 9% |
| ADT | ADRIATIC METALS CDI 1:1 | 25,894,400 | 278,062,106 | 9% |
| LTR | LIONTOWN RESOURCES | 224,187,943 | 2,425,108,140 | 9% |
| KAR | KAROON ENERGY LTD | 65,626,146 | 779,344,840 | 8% |
| LIC | LIFESTYLE COMMUNITIES | 9,839,705 | 121,740,054 | 8% |
| CTD | CORPORATE TRAVEL | 11,265,544 | 146,325,746 | 8% |
| GMD | GENESIS MINERALS | 85,171,861 | 1,128,548,275 | 8% |
| JLG | JOHNS LYNG GROUP | 20,965,374 | 281,293,351 | 7% |
| SYA | SAYONA MINING LTD | 750,703,519 | 10,293,296,014 | 7% |
| CTT | CETTIRE LTD | 27,473,775 | 381,238,220 | 7% |
| SEK | SEEK LTD | 25,228,594 | 356,820,190 | 7% |
| RIO | RIO TINTO LTD | 25,446,378 | 371,216,214 | 7% |
| FLT | FLIGHT CENTRE TRAVEL | 14,575,028 | 221,911,982 | 7% |
| STX | STRIKE ENERGY LTD | 182,479,121 | 2,865,373,749 | 6% |
| AD8 | AUDINATE GROUPLTD | 5,164,503 | 83,342,014 | 6% |
| CUV | CLINUVEL PHARMACEUTICALS | 3,088,238 | 50,060,680 | 6% |
| SLX | SILEX SYSTEMS | 14,604,969 | 237,241,524 | 6% |
| NUF | NUFARM LIMITED | 23,514,043 | 382,889,516 | 6% |
| IMU | IMUGENE LIMITED | 451,197,831 | 7,438,310,643 | 6% |
| WBT | WEEBIT NANO LTD | 11,190,914 | 189,902,055 | 6% |
| DXS | DEXUS UNITS STAPLED | 62,108,358 | 1,075,565,246 | 6% |
| BGL | BELLEVUE GOLD LTD | 71,824,663 | 1,279,998,987 | 6% |
| APE | EAGERS AUTOMOTIVE | 14,146,372 | 258,074,137 | 5% |
| NVX | NOVONIX LTD | 27,048,398 | 493,764,317 | 5% |
| ALD | AMPOL LTD | 12,612,023 | 238,302,099 | 5% |
| CHN | CHALICE MINING LTD | 20,351,636 | 389,026,788 | 5% |
| LOT | LOTUS RESOURCES LTD | 109,164,815 | 2,101,222,748 | 5% |
| SFR | SANDFIRE RESOURCES | 23,607,808 | 458,400,401 | 5% |
| NCK | NICK SCALI LTD | 4,395,547 | 85,530,699 | 5% |
| IDX | INTEGRAL DIAGNOSTICS | 11,696,442 | 233,961,997 | 5% |
| CIA | CHAMPION IRON LTD | 24,774,607 | 518,251,001 | 5% |
| EDV | ENDEAVOUR | 83,602,932 | 1,790,980,017 | 5% |
| NAN | NANOSONICS LTD | 13,830,581 | 303,454,080 | 5% |
Pilbara Minerals (ASX:PLS) remains the most shorted stock on the ASX with a short position of 17%. But in some sort of silver lining for the lithium producer, its short position has at least dropped slightly from 20% in September and 19% in October.
Atchison investment analyst Mishan Dahia told Stockhead the materials sector dominated the list of ASX most-shorted stocks at 39%, followed by energy and consumer discretionary, both on 18%, information technology at 7%, and healthcare at 7%.
“Lithium companies dominate short interest in the materials sector,” Dahia said.
Other lithium plays shorted include Sayona Mining (ASX:SYA), Mineral Resources (ASX:MIN) and Liontown Resources (ASX:LTR).
Rio Tinto (ASX:RIO) – which recently announced a $10bn deal to acquire Arcadium Lithium (ASX:LTM) – in a bullish support for lithium’s long term prospects is also among the ASX’s most shorted stocks.
“While lithium prices have faced headwinds (down 41% in the past year), the supply/demand imbalance, China’s self-reliance, and a strong US dollar have likely contributed to the downward pressure on these companies,” Dahia said.
While lithium prices are down from their 2022 peaks they have been trending up of late, benefiting from an uptick in demand and various Chinese stimulus packages, including doubling government subsidies for consumers who trade in conventional cars for electric vehicles.
Morningstar reckons lithium prices may have hit bottom and remains bullish on the future facing commodity.
“As demand growth overtakes supply, we predict the market will return to balance in 2025 from a current supply deficit,” Morningstar associate investment specialist Simonelle Mody said.
“This should lead to higher prices, which are the strongest catalyst for lithium stocks.”
The Pilbara share price is down ~35% YTD.
Uranium stocks remain target of short sellers, despite lift in prices
Uranium plays Boss Energy (ASX:BOE), Paladin Energy (ASX:PDN) and Deep Yellow (ASX:DYL) also remain the target of short sellers despite the price of the commodity edging higher.
Uranium prices have climbed over 10% in the past two weeks, driven by the re-election of Donald Trump as US president and Russia’s export ban on enriched uranium to the US.
However, Dahia said many major ASX and global uranium stocks have struggled through the second half of 2024, weighed down by a weaker uranium price and, for some, ongoing operational challenges.
Boss Energy and Deep Yellow have dropped close to 50% in six months, following strong rallies earlier in the year. Paladin is down around 19% YTD.
Short positions in consumer discretionary
Dahia said short positions in consumer discretionary stocks including Domino’s Pizza Enterprises (ASX:DMP), Cettire (ASX:CTT) and Nick Scali (ASX:NCK) suggested investor caution around consumer spending, labour costs and supply chain constrains.
He said Domino’s Pizza had been hindered by margin pressure, rising ingredients and labour costs, while Cettire had been impacted by falls in luxury spending and elevated interest rates.
“Nick Scali with a short position of 5% has been affected by recent supply chain challenges/UK expansion,” he said.
