Three distinct signals are shifting simultaneously on SGOL, the abrdn Physical Gold Shares ETF. Options traders are cutting downside hedges. Short sellers are retreating. Yet the cost to borrow shares has more than doubled in a week — a curious split worth watching.
The put-call ratio on SGOL has dropped to 0.30. That is nearly two standard deviations below its 20-day mean of 0.34 (z-score: -1.89). The ratio has fallen steadily over the past two weeks, down from 0.37 in mid-May. Traders are buying fewer puts relative to calls — a clear shift toward bullish positioning in the gold ETF.
The 52-week range on the PCR runs from 0.03 to 0.84, so the current reading sits in the lower third of that range. The direction of travel, rather than the absolute level, is the signal here.
Short interest on SGOL fell 15.4% in one week. It now sits at 0.52% of free float — near a three-month low. In absolute terms, roughly 922,000 shares are held short. That is a low level for any equity instrument, and for a physical gold ETF it is not a meaningful structural short. The one-month figure does show a 35% rise in positions during May, followed by this rapid unwind — suggesting tactical rather than fundamental shorting.
Despite short sellers cutting positions, the cost to borrow SGOL shares has surged 109% over the past week to 0.55%. That is also up 55% over the past month. In absolute terms, 0.55% remains cheap — the borrow market is far from stressed. Availability stands at 525%, meaning roughly five shares are available to borrow for every one currently lent out. Availability has tightened from over 1,200% just two weeks ago, but remains well within normal range.
The borrow cost spike while short interest falls is counterintuitive. It may reflect temporary dislocation in the securities lending market for gold ETFs — possibly linked to broader repositioning in gold-related instruments through mid-June.
The convergence here tells a bifurcated story. Options sentiment is unambiguously bullish. Short sellers are retreating. But rising borrow costs alongside falling short interest — a normally contradictory pair — suggest the gold lending market is experiencing some turbulence beneath the surface.
SGOL's price has risen 1.8% over the past week and is off 4.6% over the past month. The ETF has no upcoming earnings events.
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