New figures show which FTSE 100 stocks are most heavily shorted, based on their free float percentage, amid growing bearish investor sentiment toward various industry sectors and companies. Regulatory filings and market analysis reveal which stocks short-sellers are targeting on the London Stock Exchange, based on concerns about earnings, sector challenges, and valuations.

How Short Interest is Measured

The short interest percentage of the free float serves as a primary indicator for assessing the volume of borrowed company shares, which investors use to predict price declines. The percentage provides better insight into a company's financial status than basic short-position numbers because it includes information about both liquidity and share structure.

The Financial Conduct Authority (FCA) mandates disclosures of important short positions in UK-listed stocks while platforms like Ortex, ADVFN and ShortTracker collect and analyse this data to identify market trends. Our report ranks FTSE 100 companies based on free-float short interest using the latest aggregated data.

Top 3 Most Shorted FTSE 100 Stocks

• Sainsbury’s Plc (7.33% Free-Float Short Interest) - Sainsbury’s leads the list as the UK's second-largest supermarket chain. The grocery sector faces robust competition from discount stores such as Aldi and Lidl which has negatively impacted sentiment. The financial market has seen increased shorting activity due to concerns about cost inflation and restricted consumer purchasing power during a period of high interest rates (Ortex).
• Hargreaves Lansdown Plc (7.24% Free-Float Short Interest) - The investment platform Hargreaves Lansdown holds second place while dealing with increasing pressure from reduced investor trading volumes and fee squeezes amid macroeconomic volatility. According to analysts, the rise in low-cost market competition has become a principal reason for short-sellers to target the stock (ShortTracker).
• Yellow Cake Plc (6.36% Free-Float Short Interest) - Yellow Cake holds the third position as a uranium holding vehicle that benefits from nuclear energy trends. Uranium market volatility has driven cautious investors to target this investment opportunity. Short interest has stayed high in recent months as the long-term outlook for nuclear energy adoption continues to change (ADVFN).

Stocks Ranked 4 to 6

• Ocado Group Plc (6.25% Free-Float Short Interest) - The UK-based online grocery and technology firm Ocado stands prominently on short-sellers' watch lists. Even though Ocado’s innovative solutions have captured investor interest, the company faces ongoing losses in its online grocery sector and scalability doubts which negatively impact market sentiment (Ortex).
• Abrdn Plc (5.68% Free-Float Short Interest) - Lower asset valuations alongside weaker net inflows have positioned Abrdn as a natural target for selling entities in the market. The bearish market projection is strengthening due to increased market volatility impacting long-term revenue growth predictions (ShortTracker).
• Domino’s Pizza Group Plc (4.30% Free-Float Short Interest) - The strong consumer brand of Domino’s fails to shield it from scepticism about rising input costs throughout its UK and international operations. The ongoing conflict between franchise operators and corporate executives stands as another factor behind the increased short positions (ShortTracker).

Stocks Ranked 7 to 10

• Indivior Plc (4.17% Free-Float Short Interest) - The addiction treatment specialist pharmaceutical firm Indivior has been targeted with short interest due to regulatory investigations and concerns about generic competition for its main product lines like Ortex.
• Kingfisher Plc (4.14% Free-Float Short Interest) - Kingfisher Plc faces ongoing difficulties due to the reduced demand for home improvement products while consumers reduce their spending. Short-sellers show little faith in the management's proposed recovery strategies, according to ADVFN.
• Wood Group (John) Plc (4.07% Free-Float Short Interest) - The engineering consulting company Wood Group faces investor short selling due to persistent issues with its energy projects and stagnant revenue. The unanswered questions regarding Wood Group's transition to renewable energy projects fuel investor scepticism (ShortTracker).
• Boohoo Group Plc (3.55% Free-Float Short Interest) - Online fashion retailer Boohoo concludes the list with its initial public offering (IPO) on the AIM market. Despite attempts to reduce its overseas exposure, the Boohoo Group Plc faces concerns about declining online sales growth and increasing return rates (Ortex).

Sector Patterns and Drivers

The financial and retail sectors make up the majority of the top ten shorted stocks on the FTSE 100, as cautious consumer spending patterns and restricted market conditions put pressure on them. The prevalence of high free-float short interest levels indicates bearish market sentiment, which results from fundamental weaknesses alongside economic volatility and competitive challenges. Multiple sectors are facing notable headwinds due to increasing interest rates, combined with inflationary costs and tighter regulatory scrutiny.

Under specific circumstances, abrupt changes in positions with significant short interest can trigger short squeezes. Sainsbury’s and Hargreaves Lansdown shares could experience substantial volatility when sentiment changes or earnings exceed expectations, serving as catalysts.

Implications for UK Investors

UK investors gain essential market intelligence and identify investment opportunities through close observation of FTSE 100 stocks with substantial short positions. When free-float short interest levels rise, it reveals risks related to business models and creates opportunities for contrarian investors. Tracking changes in short-selling sentiment and using favourable price movements to your advantage can reveal hidden value even when market conditions are difficult.