UK sees major uptick in short-selling in the Autumn
New analysis by global law firm White & Case LLP of FCA data published on 28 October 2026 reveals a substantial increase in the number of companies with significant disclosed short positions since the summer.
Highlights
- Since 6 July 2026, the number of listed companies with disclosed aggregate short positions at or above 5% has risen by 122%, from 27 to 60
- Over the same period, the number with positions above 10% has increased sevenfold, from two to 14
- Housebuilders and building materials groups were prominent among companies with the highest disclosed short positions, accounting for five of the 14 companies above 10%
- Retail and grocery companies also featured, with disclosed aggregate short positions of 11.16% in WH Smith and 9.84% in Ocado Group
- Ceres Power had the highest disclosed aggregate short position at 18.71%, followed by Yellow Cake at 15.87% and Pennon Group at 14.33%
With valuations under pressure, investors are targeting companies which appear overvalued
The opportunities for short-sellers are more attractive now than they have been for many years. Valuations have come under significant pressure this year amid heightened geopolitical tensions and fears over AI-related disruption. This has prompted investors to take a closer look at those UK-listed companies that appear overvalued and whose fundamentals don’t support their valuations.
Companies in the housebuilding, building materials, retail and consumer sectors have come under particular scrutiny because of their exposure to inflationary pressures, higher interest rates and shifts in consumer confidence.
The increase may also partly reflect recent regulatory changes, which could broaden participation in UK short-selling
Some of the reported increase in disclosed short positions may also reflect changes introduced in July 2026 to the FCA’s methodology for publishing aggregated net short positions.
In addition, these recent regulatory changes may encourage a wider range of investors to engage in short activity in the UK. Under the old regime, a fund building a position above 0.5% knew its name would appear publicly next to that position. However, since July 2026, the disclosure of short positions has been aggregated and anonymised by the FCA at company level, which removes the spotlight on named short sellers. This may encourage some investors to take larger and more numerous short positions in UK-listed companies than they would under the old named-disclosure regime.
Commenting, Patrick Sarch, head of UK Public M&A at global law firm White & Case LLP, said: “We predicted at the end of last year that 2026 would see a significant increase in shorting and these figures show that it has now reached new highs in UK public markets. The volatile macro-economic and geopolitical background has created a very attractive environment for short-sellers and bear analysts looking for opportunities to correct overvalued share prices.
“Boards should prepare for short-selling pressure before it arises. As short-selling becomes an increasingly prominent feature of the market, it should be treated by boards as a mainstream risk and integrated into companies’ risk management frameworks, with companies actively planning for, and not just reacting to, these pressures.
“The best means of prevention, as well as defence, is being on the front foot. Boards should proactively engage with investors and analysts throughout the year, setting out their investment case and demonstrating its successful delivery, addressing concerns and communicating clear capital allocation priorities and routes to value creation – before someone presents their alternative analysis.
“While we expect more and more companies to be exposed to short-selling, many will bounce back successfully and it is important to remember that, at a macro level, shorting continues to play a healthy role in capital markets, supporting price discovery, liquidity, transparency and market discipline.”