Following the end of South Korea’s short selling ban, speculative activity has returned, with sharp increases in short interest. Ecopro, LG Energy, and Posco are top targets, all linked to the EV supply chain. Higher borrow rates and rising demand suggest sustained bearish sentiment in these names.

The 17-month restriction on short selling S Korean-listed equities may have prevented full price discovery by speculative investors, until now.

Screening for increasing short interest provides an early/real-time signal to which companies short sellers believe valuation is stretched, and/or forecast a bearish outlook.

Top 10 biggest SI movers since lifting of short selling ban, measured in terms of % Float, highlighted bold:

Ecopro, LG Energy and Posco are all part of the EV battery/materials supply chain, an area that has been targeted by short sellers globally for some time.

Note they also have the highest SI % Floats and SI $ Notional exposures of the top 10 movers.

Financing (borrow rate) and liquidity (DTC) must also be accounted for, to properly assess cost of carry, and trading risks.

As italicized by the Last/Spot Rates, the majority of fees are trading higher than their Offer, which is another indication of increased short demand.

Short sellers are re-engaging South Korea’s equity market after a 17-month ban, with EV-related names facing the most pressure. Elevated borrow costs and tight liquidity reinforce conviction in bearish trades. Investors should monitor short interest, financing conditions, and exposure to key supply chains as sentiment recalibrates in a reopened market.

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