The Most Shorted Stocks on the FTSE

The Most Shorted Stocks on the FTSE

January’s spike in market volatility came after a fairly benign 2021 for stocks, reminding investors that what goes up sometimes also comes down. Whether this is a long-expected collapse or just a wobble is hard to tell at this juncture. What a market correction does do is offer opportunities for short sellers, who bet on the prices of share prices falling.

There have been plenty of heavy one-day falls in recent trading sessions, especially in the US, where Peloton (PTON) and Netflix (NFLX) have plunged on negative newsflow. In UK we’ve seen some strong price moves in individual stocks, not least at The Hut Group (THG), whose shares are down 40% so far this year after a precitipous decline in 2021.

Handily, the Financial Conduct Authority (FCA) produces a daily list of the most shorted stocks. This dynamic list gives an insight into what professional investors think about particular sectors, and sometimes gives an early warning sign of a company in trouble. That could be helpful to retail investors if they’re looking to sell out of an underperforming stock.

The list shows changes in sentiment towards certain sectors: oil shares were heavily shorted in 2020, for instance, but the latest rebound means they have