In a market of headwinds aplenty, where nothing really seems to be working, one momentum trade continues to gain traction... Buying the ASX's most shorted stocks. 

In fact, since hitting lows in June, companies like Betmakers, Nanosonics, Block, Zip Co, and Lake Resources have skyrocketed higher, lifting a respective 33%, 47%, 30%, 132% and 101%. 

So what does this mean for investors like you? Well, my friend, cast your mind back to the now infamous short squeeze of January 2021 - GameStop. 

Back then, hedge funds were forced to cut their losses and buy back shares to cover their short positions, as retail investors continued to bid GameStop's share price higher. This drove the momentum in the company's share price, forcing it higher still. Its a classic supply-demand equation, but in this case, not enough supply of those selling the stock, and too much demand from buyers.  

So could there be some short squeeze candidates hiding among Australia's most-shorted stocks? Unfortunately, for us investors, this is a very difficult (and potentially dangerous) game to play. 

So why not take a longer-term view? In this episode, Livewire's Ally Selby was joined by Ben Clark from TMS Capital and Henry Jennings from Marcus Today for their views on the five most-shorted stocks on the ASX. 

Note: This episode of Buy Hold Sell was filmed on Wednesday 17th August 2022. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-5-of-the-most-shorted-stocks-on-the-asx/