While most investors want share prices to appreciate, not all of them do.
Some will borrow shares to sell on market with the aim of buying them back at a cheaper price further down the line.
This high risk investment strategy is known as short selling or shorting.
Here are the 10 most shorted shares on the ASX this week according to data provided by ASIC:
- Syrah Resources Ltd (ASX: SYR) is still the most shorted share on the ASX with 18.1% of its shares in the hands of short sellers. Traders appear to believe that the company's massive graphite project will result in an oversupply of the metal.
- Independence Group NL (ASX: IGO) has seen its short interest rise again to 17.1%. Short sellers may be bearish on the gold miner due to its production delays and the prospect of rising rates in the United States.
- Western Areas Ltd (ASX: WSA) has seen its short interest remain flat at 14.9%. Nickel prices rebounded slightly last week, which could be a reason for short sellers to be concerned.
- Orocobre Limited (ASX: ORE) has seen its short interest fall yet again, this time to 14.7%. Short sellers appear to be closing their positions in a hurry due to the increasingly bullish outlook for global lithium demand.
- JB Hi-Fi Limited (ASX: JBH) has short interest of 14.2%. Short sellers are likely to be bearish on the retailer due to Amazon's impending launch in Australia.
- Select Harvests Limited (ASX: SHV) has 13.3% of its shares held short. The almond producer could, however, be the subject of a potential takeover offer in the near future. This could possibly lead to a short squeeze.
- Myer Holdings Ltd (ASX: MYR) has 13.1% of its shares held short after its recent full-year results revealed that its turnaround plan was not progressing as expected.
- Domino's Pizza Enterprises Ltd. (ASX: DMP) has 12.1% of its shares held short. Short interest has fallen sharply in recent weeks, possibly indicating that its shares have now bottomed.
- Healthscope Ltd (ASX: HSO) has short interest of 11.9%. Short sellers have been steadily increasing their exposure to the healthcare company after it cut its dividend and advised that it expects EBITDA to be flat in FY 2018.
- Ardent Leisure Group (ASX: AAD) has re-entered the top 10 with short interest of 11.5%. Short sellers may believe that the entertainment company's U.S. operations have been negatively impacted by the recent severe weather in Texas.
