Which ASX Sectors Get Shorted the Most — And Why

Short selling isn't spread evenly across the ASX. Certain sectors consistently attract more bearish attention than others, and the reasons tell us a lot about how professional investors think about risk.

The Sector Breakdown

Based on ASIC short position data tracked on Shorted.com.au, these are the sectors that consistently see the highest short interest on the ASX.

Mining and Resources

Typical short interest range: 3–12%

The resources sector is perennially one of the most shorted on the ASX. This isn't surprising — mining companies are fundamentally exposed to commodity price cycles, operational risks, and geopolitical factors that are inherently difficult to predict.

Why shorts target mining stocks:

• Commodity prices can collapse rapidly (lithium fell over 80% from its 2022 peak)
• Many junior miners have unproven reserves and cash burn concerns
• Production disruptions, permitting delays, and cost blowouts are common
• Cyclical nature creates natural short-selling windows during downturns

Notable examples: Lithium stocks like PLS, MIN, and LTR saw massive short interest buildups during the lithium price correction of 2023-2024. Iron ore miners face persistent bearish bets tied to China demand concerns.

Technology and Fintech

Typical short interest range: 4–15%

High-growth tech and fintech stocks are magnets for short sellers, particularly when valuations stretch beyond what fundamentals can justify.

Why shorts target tech stocks:

• Many are unprofitable or pre-revenue, making them vulnerable to sentiment shifts
• High valuations leave little room for disappointment
• Rapid industry change means today's leader can be tomorrow's laggard
• Rising interest rates compress the value of future earnings

Notable examples: Buy-now-pay-later stocks (ZIP, SZL) saw some of the highest short interest on the ASX during the sector's correction. Enterprise software companies with persistent losses also attract bearish attention.

Healthcare and Biotechnology

Typical short interest range: 5–15%

Biotech is the sector where the gap between potential and reality is largest — and short sellers exploit that gap aggressively.

Why shorts target biotech:

• Binary outcomes from clinical trials (pass or fail)
• Long timelines to profitability create funding risk
• Regulatory hurdles add layers of uncertainty
• Retail enthusiasm can push valuations far beyond reasonable levels

Notable examples: Companies awaiting FDA or TGA decisions regularly appear in the most shorted lists, as do biotechs with questionable science or repeated capital raises.

Real Estate (REITs)

Typical short interest range: 2–6%

Real estate investment trusts attract short interest when the property market faces headwinds — particularly during rising interest rate cycles.

Why shorts target REITs:

• Direct sensitivity to interest rate movements
• Leverage amplifies both gains and losses
• Property valuations lag reality, creating disconnect opportunities
• Work-from-home trends pressure commercial property fundamentals

Consumer Discretionary

Typical short interest range: 2–8%

Retailers and consumer-facing businesses see increased short interest during economic downturns, when consumer spending contracts.

Why shorts target consumer stocks:

• Sensitive to economic cycles and consumer confidence
• Competition from online retail pressures margins
• Inventory management challenges can erode profitability
• Brand relevance can shift rapidly

Sectors That Rarely Get Shorted

Interestingly, some sectors consistently see very low short interest:

Utilities and Infrastructure

Typical short interest: Under 1%. Predictable cash flows, regulated returns, and defensive characteristics make these unattractive targets for short sellers.

Major Banks (Big 4)

Typical short interest: 1–3%. While not immune to short selling, CBA, NAB, WBC, and ANZ are too large, too liquid, and too well-capitalised to be attractive short targets under normal conditions.

What This Means for Investors

Understanding sector-level short interest patterns helps in several ways:

1. Risk assessment: High short interest across a sector signals broad bearish sentiment — useful context even if you disagree with the bears
2. Contrarian opportunities: When short interest is extremely high in a sector that's showing fundamental improvement, a sector-wide rally could trigger widespread covering
3. Portfolio construction: Being aware of which sectors carry the most short-selling risk can inform diversification decisions
4. Macro signal: Changes in sector-level short interest can provide early warnings about economic shifts

Track Sector Short Interest on Shorted

Our industry analysis page breaks down short interest by sector, allowing you to:

• Compare short interest across all ASX industry groups
• Track how sector sentiment changes over time
• Identify which industries are seeing rising or falling bearish bets
• Drill down into individual stocks within each sector

Understanding where the bears are concentrated gives you an edge — whether you agree with them or not.

Explore ASX industry short interest →

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This content is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.