Just as we see in the U.S. & European Regions, we are seeing increased short exposure in Hong Kong\China in the first two weeks of 2026 with short interest increasing by $6.9 billion or +6%.

This $6.9 billion increase in short interest is made up of $244 million of new short selling and a $6.7 billion mark-to-market increase of existing short positions. Shorts are shorting into a rising market.

The reason short sellers are increasing their exposure in unprofitable positions is because they are looking to increase their overall long & short leverage in the region.

Only one out of twelve sectors had a decrease in short interest, Financial Securities (ETFs) short interest declined by $80 million while the Health Care and Financials sectors were up $1.4 billion and $1.0 billion respectively.

H.K.\Chinese short interest increased from $110 billion at the beginning of 2026 to $117 billion on January 15th. This increase was made up of $244 million of increased short selling and a $6.7 billion mark-to-market increase in the value of existing shorts. The largest amount of new short selling occurred in the Information Technology sector while Communication Services saw the most short covering.

Shorts have incurred mark-to-market losses in all H.K.\Chinese Japanese sectors so far in 2026 and are down -$6.8 billion, -5.94%, in mark-to-market losses. Shorting into a rising market indicates that short sellers are either looking for a pullback or are leveraging their portfolios on both the long and short sides.

We can look at the specific stocks with the largest increase of short selling and short covering in the Industry Groups with the largest increases and decreases in short selling:

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