The shorts cashed in as this ASX stock dropped 57% in a day

Those who have been watching the shorts market with interest this year will know that there is one stock that has taken much of the focus.

Embattled uranium miner Lotus Resources (ASX: LOT) halted trading for six weeks in June, in order to secure a $60 million capital raise designed to rescue its Kayelekera project. 

The problem for investors was that the funds were raised at a share price of $0.22, a 66% discount.

When trading finally resumed on 27 July, the stock immediately plunged 57% to $0.24. It was the day short sellers had been waiting for, with many seemingly cashing in and temporarily squeezing the share price up to $0.345 before it dropped back to $0.25.

The only silver lining for Lotus is that total short interest has now fallen from almost 23% to 12.41%, as of 4 August, ending its eventful reign as the ASX's most-shorted stock. 

The most-shorted stocks

It means Droneshield (ASX: DRO) now has that mantle, with short interest in the counter-drone company rising above 15%. The stock is down 34% in six months and down 67% from its October high. 

It's joined by another down-on-its-luck recent market darling, 4DMedical (ASX: 4DX), which has also seen short interest tick up to 12.60% in recent weeks.  

Domino's Pizza (ASX: DMP) makes up the top three, having been a regular target for short sellers over its long, multi-year decline. 

It also means Lotus has dropped to fourth place overall.

The stocks attracting more short interest 

Alongside Droneshield, a handful of resources stocks are seeing the biggest uptick in short interest, as of 3 August. 

Copper and lithium producer Develop Global (ASX: DVP) tops the list ahead of Droneshield, with uranium explorer Cauldron Energy (ASX: CXU) and high purity aluminium producer Alpha HPA (ASX: A4N). 

With many of the stocks on these lists still due to report, including Droneshield, it's likely we'll continue to see some big movements.