• Flight Centre remains most shorted ASX stock but its short position improves heading into spring
  • Popular lithium plays are among the most shorted ASX stocks, including Lake Resources and Core Lithium
  • BNPL and health stocks see their short positions drop in September, while rate sensitive companies increase

How does shorting work?

Shorting works by selling stocks you do not actually own in the hope of buying them back at a lower price. Investors are in effect betting they will fall.

Because shorting is restricted under Australian law, any substantial shorting of stocks is worth knowing about, even if you only trade long.

Stockhead has utilised the number of short positions as a percentage of total shares on issue. The most shorted ASX stocks all have 5% or more.

Code Company Short positions Shares on issue % short positions
FLT FLIGHT CENTRE TRAVEL ORDINARY 30,775,136 200,033,998 15.38%
BET BETMAKERS TECH GROUP ORDINARY 124,940,841 904,456,199 13.81%
LKE LAKE RESOURCES ORDINARY 140,652,375 1,389,973,709 10.12%
SQ2 BLOCK CDI 1:1 NYSE 3,752,171 37,614,529 9.98%
ZIP ZIP CO LTD 67,622,580 687,983,539 9.83%
CCX CITY CHIC COLLECTIVE ORDINARY 21,957,125 231,920,086 9.47%
DEG DE GREY MINING ORDINARY 124,525,171 1,410,667,806 8.83%
NAN NANOSONICS LIMITED ORDINARY 26,308,199 301,947,936 8.71%
EML EML PAYMENTS LTD ORDINARY 29,282,328 373,651,038 7.84%
RRL REGIS RESOURCES ORDINARY 58,085,134 755,025,925 7.69%
TPW TEMPLE & WEBSTER LTD ORDINARY 9,284,995 120,893,504 7.68%
PBH POINTSBET HOLDINGS ORDINARY 22,956,302 305,635,657 7.51%
MP1 MEGAPORT LIMITED ORDINARY 11,637,060 158,135,249 7.36%
BRG BREVILLE GROUP LTD ORDINARY 10,396,344 142,459,749 7.30%
92E 92ENERGY ORDINARY 5,653,766 81,878,696 6.91%
PNV POLYNOVO LIMITED ORDINARY 45,467,654 661,688,044 6.87%
BGL BELLEVUE GOLD LTD ORDINARY 71,729,998 1,045,377,255 6.86%
KGN KOGAN.COM LTD ORDINARY 7,138,656 107,044,098 6.67%
VUL VULCAN ENERGY ORDINARY 9,412,498 143,335,301 6.57%
PNI PINNACLE INVESTMENT ORDINARY 13,043,074 199,562,935 6.54%
APX APPEN LIMITED ORDINARY 7,998,594 123,446,356 6.48%
CUV CLINUVEL PHARMACEUT. ORDINARY 3,142,917 49,410,338 6.36%
MFG MAGELLAN FIN GRP LTD ORDINARY 11,620,276 184,883,839 6.29%
AMA AMA GROUP LIMITED ORDINARY 65,368,489 1,073,070,217 6.09%
WEB WEBJET LIMITED ORDINARY 22,178,392 380,851,484 5.82%
UMG UNITED MALT GROUP ORDINARY 16,163,022 299,179,135 5.40%
IMU IMUGENE LIMITED ORDINARY 313,123,054 5,866,594,610 5.34%
IEL IDP EDUCATION LTD ORDINARY 14,693,667 278,336,211 5.28%
CXO CORE LITHIUM ORDINARY 90,726,531 1,737,195,356 5.22%
BRN BRAINCHIP LTD ORDINARY 88,161,601 1,719,362,144 5.13%
RBL REDBUBBLE LIMITED ORDINARY 13,782,372 275,920,223 5.00%
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A little less turbulence for Flight Centre

After remaining the most shorted ASX stock on the ASX in FY22, Flight Centre (ASX:FLT)  is still having a turbulent flight with short sellers in the first quarter of FY23.

FLT remains the most shorted stock on the ASX but its short position is continuing to slightly improve. FLT recently reported its FY22 results,  flagging a $183.1m underlying EBITDA loss – a 46% improvement on the $337.8 million FY21 result. 

The FLT share price is down more than 8% year to date.


Gambling on BetMakers losses

The second most shorted stock on the ASX is  wagering tech company Betmakers Technology Group (ASX:BET) with its short position up from ~12% in August.  Betmakers recently reported a  371% increase in revenue in FY22 to $97.1m compared to FY21. Bottom line adjusted EBITDA was $2.2m, a $3m decline from FY21.

Online sports betting company Pointsbet (ASX:PBH) has also seen its short position increase from 6.30% in August. Pointsbet posted a 52% jump in revenue but its EBITDA losses deepened to ~$243.6 million.  The company intends to continue growing in the US in the current financial year

The PBH share price is down ~66% year to date.


Lithium and gold stocks shorted

Short sellers are also looking at lithium and and gold stocks.  De Grey Mining (ASX:DEG) has seen its short positioned increased from 5.87% in August, despite as Stockhead’s Josh Chiat pointing out its Hemi find in WA’s Pilbara gold fields is tipped to live up to the early hype.

The gold producer recently announced its Hemi project as a future Top 5 gold mine with PFS outlining plans to produce 550,000oz of gold a year.

Other gold stocks shorted include Bellvue Gold (ASX:BGL) and Regis Resources (ASX:RRL).

Popular traded stock on online trading platform Stake Lake Resources (ASX:LKE) along with near-term producer Core Lithium (ASX:CXO) also remain on the short sellers list, although their positions have fallen from last month.

Core Lithium has ‘mutually’ agreed to extend the termination date for its binding offtake term sheet with Tesla to October 26.

The company’s share price is up more than 165% year to date.


BNPL and health stocks remain heavily shorted

It’s been a tough year for BNPL stocks and while the short position of Block Inc (ASX:SQ2) is on the improve from 11.47% in August,  short sellers have increased the position of Zip Co (ASX:ZIP) from 8.30% in August.

Nanosonics (ASX:NAN)Polynovo (ASX:PNV), Imugene (ASX:IMU) and Clinuvel  Pharmaceutical (ASX:CUV) also remain heavily shorted, although their short positions have improved in September.

Rate sensitive stocks make list

Short traders are continuing to bet that pandemic-era sharemarket darlings will feel the heat of surging inflation, rising interest rates and falling household wealth on their earnings.

Among consumer discretionary stocks on the hit list of short sellers are City Chic Collective (ASX:CCX)Kogan (ASX:KGN)Temple & Webster (ASX:TPW) and Redbubble (ASX:RBL), who all saw their short positions increased this month.

Redbubble reported a difficult FY22 with profits turning to loss. The e-commerce marketplace for artists reported EBITDA loss of $11.2 million, down from $52.7 million profit last year. NPAT loss was $24.6 million, compared to a profit of $31.2 million in FY21.

The Redbubble share price is down 75% year to date.


Disclosure: The author held shares in Regis Resources at the time of writing this article.