Question 1

What is short selling?

Accepted Answer

Short selling is a trading strategy where an investor borrows shares from a broker, sells them immediately at the current market price, and hopes to buy them back later at a lower price. The investor profits if the stock price falls and returns the borrowed shares, keeping the difference. Short selling is legal and regulated in Australia.

Question 2

Why do investors short sell stocks?

Accepted Answer

Investors short sell for several reasons: (1) To profit from expected price declines if they believe a stock is overvalued, (2) To hedge existing long positions against market downturns, (3) To exploit arbitrage opportunities, and (4) Market makers may short sell as part of their liquidity provision activities. Professional investors and hedge funds are the primary short sellers on the ASX.

Question 3

Is short selling legal in Australia?

Accepted Answer

Yes, short selling is legal in Australia and is regulated by ASIC (Australian Securities and Investments Commission). However, 'naked' short selling—selling shares without first arranging to borrow them—is illegal. All short sellers must have a securities lending arrangement in place before selling.

Question 4

What are the risks of short selling?

Accepted Answer

Short selling carries significant risks: (1) Unlimited loss potential—unlike buying shares where losses are capped at your investment, short sellers can lose more than their initial margin if the stock price rises indefinitely, (2) Short squeeze risk where rapid price increases force covering at losses, (3) Borrowing costs can be substantial for hard-to-borrow stocks, (4) Margin calls may force position closure at unfavorable prices, and (5) Dividend payments must be paid to the lender.

Question 5

What is a short squeeze?

Accepted Answer

A short squeeze occurs when a heavily shorted stock's price rises rapidly, forcing short sellers to buy shares to cover their positions and limit losses. This buying pressure drives the price even higher, creating a feedback loop that can cause parabolic price movements. Famous examples include GameStop (US) and some ASX mining stocks. High short interest combined with positive catalysts can trigger squeezes.

Question 6

What is ASIC short position data?

Accepted Answer

ASIC (Australian Securities and Investments Commission) collects and publishes aggregated short position data for ASX-listed securities. Market participants must report their short positions to ASIC, which then publishes the total short positions daily. This data helps investors understand market sentiment and identify heavily shorted stocks.

Question 7

What is the T+4 delay and why does it exist?

Accepted Answer

The T+4 delay means ASIC publishes short position data 4 trading days after the positions are reported. For example, Friday's publication shows Monday's positions. This delay exists to: (1) Protect reporters' trading strategies from front-running, (2) Allow time for accurate data compilation, (3) Prevent potential market manipulation, and (4) Maintain fair markets where no party has immediate access to position changes.

Question 8

How often is short position data updated?

Accepted Answer

ASIC publishes short position data every trading day, typically in the late afternoon Australian Eastern time. The data reflects positions from 4 trading days prior (T+4). On Shorted.com.au, we update our database as soon as ASIC releases new data, typically within minutes of publication.

Question 9

What is the reporting threshold for short positions?

Accepted Answer

Market participants must report short positions to ASIC when they exceed $100,000 AUD or 0.01% of the company's total issued capital, whichever threshold is reached first. This ensures significant positions are captured while avoiding administrative burden for small positions.

Question 10

Why might short position data be incomplete?

Accepted Answer

Short position data may not capture all short activity because: (1) Positions below the reporting threshold aren't included, (2) Some synthetic short positions via derivatives may not be captured, (3) Intraday short positions that are covered before reporting time aren't recorded, and (4) International short selling through offshore entities may have different reporting requirements.

Question 11

What does high short interest indicate?

Accepted Answer

High short interest indicates that many investors are betting against a stock, expecting its price to fall. It can signal: (1) Professional investors see fundamental problems, (2) The stock may be overvalued, (3) Sector headwinds are expected, or (4) Specific company issues are anticipated. However, high short interest can also indicate short squeeze potential if positive catalysts emerge.

Question 12

What is considered 'high' short interest?

Accepted Answer

On the ASX, short interest levels are typically interpreted as: Below 5% = Low (normal levels), 5-10% = Moderate (some bearish sentiment), 10-15% = Elevated (significant bearish interest), 15-20% = High (heavily shorted), Above 20% = Very High (extreme bearish sentiment, potential squeeze candidate). Context matters—some sectors like mining naturally have higher short interest.

Question 13

How should I use short interest in my investment decisions?

Accepted Answer

Short interest should be one factor among many in your analysis. Consider: (1) Combine with fundamental analysis—are shorts justified by company issues? (2) Look at trends over time, not just current levels, (3) Check industry context—is the whole sector being shorted? (4) Consider potential catalysts that could prove shorts wrong, (5) Be aware that following short sellers isn't always profitable as they can be wrong.

Question 14

What is 'days to cover' and why does it matter?

Accepted Answer

Days to cover is calculated by dividing the total short interest by the average daily trading volume. It estimates how many days it would take for all short sellers to cover their positions. A high days-to-cover ratio (above 10-15 days) suggests shorts would struggle to exit quickly, increasing short squeeze potential. Low ratios indicate shorts can cover easily without significantly moving the price.

Question 15

Can short interest predict stock price movements?

Accepted Answer

Short interest has mixed predictive value. Research shows: (1) Heavily shorted stocks do tend to underperform slightly on average, (2) However, short squeezes can cause significant short-term outperformance, (3) Shorts are sometimes wrong about fundamentals, (4) The market can remain irrational longer than shorts can stay solvent. Use short interest as one input, not a crystal ball.

Question 16

Is Shorted.com.au free to use?

Accepted Answer

Yes! Shorted.com.au provides free access to ASIC short position data, historical charts, industry analysis, and basic features. We believe market transparency should be accessible to all Australian investors. Premium features for advanced analysis may be available in the future, but core functionality will always remain free.

Question 17

Where does Shorted.com.au get its data?

Accepted Answer

All short position data comes directly from official ASIC (Australian Securities and Investments Commission) publications. Stock price data is sourced from reputable market data providers. Company metadata is sourced from ASX announcements and public filings. We do not create or estimate short position data—everything is based on official regulatory filings.

Question 18

How do I find the most shorted stocks?

Accepted Answer

Visit our Top 100 page at shorted.com.au/top to see live rankings of the most shorted ASX stocks. You can filter by time period, view biggest movers (increases and decreases), and see industry breakdowns. Each stock links to a detailed page with historical charts and company information.

Question 19

Can I track specific stocks I'm interested in?

Accepted Answer

Yes! Create a free account to use our Portfolio feature at shorted.com.au/portfolio. Add your stock holdings to monitor short interest across your portfolio. You can see aggregate exposure to short selling and track how short positions in your holdings change over time.

Question 20

How do I use the industry analysis features?

Accepted Answer

Visit shorted.com.au/industry to explore short positions organized by ASX industry sectors. You can see which industries have the highest average short interest, compare sectors, and drill down to see individual stocks within each industry. The treemap visualization on the Top page also provides a visual industry breakdown.

Question 21

Is there an API available for developers?

Accepted Answer

Yes! We provide API access for developers and researchers. Visit our API documentation at shorted.com.au/docs/api-reference for endpoint details, authentication information, and usage examples. We also provide LLM-optimized documentation for AI applications at shorted.com.au/docs/llm-context.

Question 22

Do I need an account to use Shorted.com.au?

Accepted Answer

No account is required to view short position data, charts, and analysis. However, creating a free account unlocks additional features like custom dashboards, portfolio tracking, and saved preferences. Account creation is optional and takes less than a minute.

Question 23

What authentication methods are supported?

Accepted Answer

We support secure authentication via Google and email/password. We use industry-standard OAuth 2.0 for social logins and never store your social media passwords. All authentication is handled securely through our authentication provider.

Question 24

How do custom dashboards work?

Accepted Answer

Custom dashboards allow you to create personalized views of short selling data. Add widgets for top shorts, industry treemaps, specific stock charts, and more. Arrange and resize widgets to create your ideal layout. Dashboards auto-save and sync across devices when you're logged in.

Question 25

Is my data and portfolio information secure?

Accepted Answer

Yes. We take security seriously: (1) All connections use HTTPS encryption, (2) We don't store sensitive financial data—portfolio holdings are optional and self-reported, (3) We never share or sell user data, (4) Authentication uses secure, industry-standard protocols, (5) We comply with Australian privacy laws.

Question 26

Why might there be discrepancies with other data sources?

Accepted Answer

Minor discrepancies can occur due to: (1) Different data update timing—we update within minutes of ASIC publication, (2) Rounding differences in percentage calculations, (3) Different treatment of edge cases like stock splits or corporate actions, (4) Historical data corrections by ASIC that may not be reflected everywhere. Our source is always official ASIC data.

Question 27

How is short interest percentage calculated?

Accepted Answer

Short interest percentage = (Total Reported Short Positions ÷ Total Shares on Issue) × 100. For example, if a company has 100 million shares on issue and 10 million are reported as short positions, the short interest is 10%. We use the shares on issue figure from the ASIC report, which may differ slightly from other sources.

Question 28

What time zone is used for dates and timestamps?

Accepted Answer

All dates and times on Shorted.com.au are displayed in Australian Eastern Time (AEST/AEDT), which is the time zone of the ASX. The T+4 delay is calculated based on ASX trading days, excluding weekends and Australian public holidays.

Question 29

How far back does historical data go?

Accepted Answer

Our database contains ASIC short position data going back several years, covering the full available history of ASIC's public short position reports. Historical charts allow you to view trends over various time periods from 1 month to maximum available history.

Question 30

Can I download or export data?

Accepted Answer

Currently, data can be accessed through our web interface and API. We're exploring options for CSV/Excel exports for premium users. For bulk data needs or research purposes, please contact us to discuss data licensing options.

Frequently Asked Questions

Short Selling Basics

ASIC Data & Reporting

Interpreting Short Data

Using Shorted.com.au

Account & Features

Technical Questions

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