The September quarter was a rotation, not a de-risking. Across the 100 most shorted stocks on the ASX, average short interest rose from 6.20% of shares on issue on 19 June to 6.62% on 18 September, a move of 0.42 percentage points, and 63 of the 100 saw their short position grow. But the aggregate hides the trade. Short sellers left the consumer, media and healthcare-services names they had crowded into over the first half, and moved into defence hardware, lithium and a handful of large-cap software stocks.
This piece uses Shorted's own ASIC-derived numbers throughout. Every figure is the aggregate net short position ASIC publishes with a four-day lag, expressed as a percentage of shares on issue, and every move is in percentage points.
Where the builds went
Ten stocks account for most of the quarter's new short interest among the top 100.
| Stock | Sector | 19 Jun | 18 Sep | Move |
|---|---|---|---|---|
| Electro Optic Systems (EOS) | Capital goods | 3.25% | 10.42% | +7.18pp |
| Minerals 260 (MI6) | Materials | 3.19% | 9.27% | +6.08pp |
| Artrya (AYA) | Health care equipment | 0.97% | 4.73% | +3.76pp |
| Cobram Estate Olives (CBO) | Food, beverage and tobacco | 1.91% | 5.48% | +3.57pp |
| Sunrise Energy Metals (SRL) | Materials | 0.32% | 3.74% | +3.42pp |
| IperionX (IPX) | Materials | 8.66% | 11.99% | +3.33pp |
| Aussie Broadband (ABB) | Telecommunications | 0.97% | 4.19% | +3.22pp |
| Elevra Lithium (ELV) | Materials | 3.32% | 6.34% | +3.02pp |
| Develop Global (DVP) | Materials | 3.73% | 6.74% | +3.01pp |
| PLS Group (PLS) | Materials | 8.77% | 11.77% | +3.00pp |
Electro Optic Systems is the quarter's standout: a position that more than tripled to 10.4% puts it in the same bracket as DroneShield (DRO), which held at 14.4% through the period and remains the second most shorted stock on the exchange. Together with Silex Systems (SLX) they make capital goods the most shorted sector inside the top 100, averaging 10.8% with a quarterly build of 2.8pp, the largest of any sector.
The materials complex was broader. Twenty-five of the top 100 are materials stocks and their average short position rose 1.1pp to 6.8%. Lithium did the heavy lifting: PLS Group, Liontown (LTR) at +2.65pp and Elevra Lithium all added between 2.6 and 3.0pp, and IperionX crossed 12%. Lendlease (LLC), at +2.69pp to 8.59%, was the largest build outside those two sectors.
Large-cap software joined late. WiseTech Global (WTC) rose 2.04pp to 10.01% and Xero (XRO) 1.99pp to 5.46%, taking the software and services names in the top 100 to an average of 6.7%, up 1.1pp. The Lottery Corporation (TLC), up 2.65pp to 7.46%, and Bendigo and Adelaide Bank (BEN), up 2.46pp to 5.27%, were the other notable additions among the large caps.
Where the covering happened
| Stock | Sector | 19 Jun | 18 Sep | Move |
|---|---|---|---|---|
| Car Group (CAR) | Media and entertainment | 12.20% | 4.65% | −7.55pp |
| Lotus Resources (LOT) | Materials | 23.08% | 15.64% | −7.44pp |
| Guzman y Gomez (GYG) | Consumer services | 10.79% | 6.25% | −4.54pp |
| Healius (HLS) | Health care equipment | 10.33% | 5.85% | −4.48pp |
| Inghams (ING) | Food, beverage and tobacco | 7.47% | 3.83% | −3.63pp |
| Bannerman Energy (BMN) | Energy | 6.82% | 3.77% | −3.05pp |
| Australian Clinical Labs (ACL) | Health care equipment | 7.96% | 5.09% | −2.88pp |
| Domino's Pizza (DMP) | Consumer services | 14.41% | 11.69% | −2.72pp |
| Generation Development (GDG) | Insurance | 9.18% | 6.61% | −2.56pp |
| Megaport (MP1) | Software and services | 5.84% | 3.35% | −2.49pp |
Car Group is the quarter's largest cover in percentage-point terms and the one that changed a stock's standing most: from the top ten shorted at 12.2% in June to 4.65% now, well down the list. Lotus Resources gave back 7.4pp but from a base so high that it is still the most shorted stock on the ASX at 15.6%; the position peaked above 23% in June before the retreat.
The consumer services names moved together. Guzman y Gomez, Domino's and Flight Centre (FLT), which eased to 10.45%, pulled the sector's average within the top 100 down 1.5pp to 7.9%, even as The Lottery Corporation went the other way. Healthcare services was the other cover: Healius and Australian Clinical Labs shed 4.5pp and 2.9pp between them, which offset the Artrya build and left health care equipment and services down 0.3pp on average.
Energy shorts also eased, down 1.0pp on average across the seven energy names in the group, led by Bannerman and Beach Energy (BPT) at −2.33pp. The uranium positions that defined the first half are smaller but not gone: Boss Energy (BOE) at 12.75% and Paladin (PDN) at 10.60% are both still in the ten most shorted.
The sector picture
| Sector (members of the top 100) | Names | Average now | Quarter move |
|---|---|---|---|
| Capital goods | 3 | 10.8% | +2.8pp |
| REITs | 3 | 3.9% | +1.9pp |
| Banks | 2 | 4.8% | +1.7pp |
| Materials | 25 | 6.8% | +1.1pp |
| Software and services | 7 | 6.7% | +1.1pp |
| Financial services | 8 | 5.5% | +0.4pp |
| Food, beverage and tobacco | 5 | 7.5% | +0.2pp |
| Health care equipment and services | 9 | 6.4% | −0.3pp |
| Pharmaceuticals and biotech | 4 | 8.8% | −0.6pp |
| Energy | 7 | 7.5% | −1.0pp |
| Consumer services | 5 | 7.9% | −1.5pp |
| Media and entertainment | 3 | 4.3% | −1.9pp |
Read the table as direction, not as a ranking of sector short interest. It covers only the stocks inside the top 100, so a sector with three members is three positions; the full industry view aggregates every stock the feed reports and uses the same percentage-point convention.
The past four weeks were different
The quarter was a rotation; the last month was a broad build. Across the screener's universe of stocks with a market capitalisation above $100 million, every sector's average short position rose over the four weeks to 18 September. Software and services and health care equipment led at +1.2pp each, real estate management at +1.1pp, insurance at +0.9pp, and materials at +0.6pp; even the sectors covered through the quarter, energy at +0.3pp and consumer staples at +0.2pp, added positions in September. Whether that is reporting-season positioning unwinding into new targets or a genuine change in the level of short interest will be clear in the October data.
The list as it stands
The ten most shorted stocks on the ASX as at 18 September: Lotus Resources 15.6%, DroneShield 14.4%, Boss Energy 12.8%, 4DMedical (4DX) 12.0%, IperionX 12.0%, PLS Group 11.8%, Domino's Pizza 11.7%, Zip Co (ZIP) 11.0%, Treasury Wine Estates (TWE) 10.9% and Paladin Energy 10.6%. Telix (TLX) at 10.5% and Flight Centre at 10.5% sit just outside.
Four of the ten were not in the ten a quarter ago. That is the rotation in one line.
Method
The universe is the 100 stocks with the highest short position as a share of shares on issue on 18 September 2026, using the daily aggregate ASIC publishes with a T+4 lag. Moves compare the first and last observation in the window (19 June and 18 September) and are quoted in percentage points, never percent, because a move from 3% to 6% is +3pp and a doubling at once. Sector averages are simple means of the members listed, not capitalisation-weighted. The four-week figures come from the screener, which excludes stocks without a market capitalisation. Full histories for every stock are on their pages, the weekly movers are in the reports, and the squeeze set-ups are on battlegrounds.