Chinese tech stocks continue to be beaten down , but short sellers appear to be targeting another sector known for its high valuations: real estate.
ETFs tracking the MSCI China Real Estate index, such as CHIR , have declined by more than 35% this year.
Short sellers of China's real estate sector already have profits on paper of $2.6 billion year-to-date, according to S3's data.
But although short sellers have been taking profits throughout the year, they've also kept taking new short positions in stocks that haven't fallen by as much.
As the downturn in the real-estate sector is predicted to last longer, "short sellers should continue to be active," according to S3 Analytics.