Options positioning in MCO has turned sharply bullish. The put-call ratio has held near 0.64 for five consecutive sessions — the lowest in 52 weeks and nearly 2.7 standard deviations below its 20-day mean of 0.79. Call buyers are dominating the options market heading into the July 21 earnings date.
The PCR shift is not subtle. For most of the prior six weeks, MCO's ratio sat comfortably between 0.80 and 0.85. Then, starting June 18, it dropped sharply and has stayed there. The 52-week low stands at 0.44 — so there is room to go further — but the current reading already marks a decisive break from the stock's recent baseline.
The stock itself has drifted. MCO closed at $447.33 on June 22, down about 1.5% over the past week. The options market and the price action are telling different stories.
Short interest ticked up 11% over the past week to 2.05% of free float. That is the highest level since mid-May. The direction is worth noting — but the absolute level is low, and the lending market remains extremely loose. Availability stands at 2,554%, meaning there are roughly 25 shares available to borrow for every one currently borrowed. Borrowing costs sit at just 0.47% annually.
This is not a borrow squeeze. The modest CTB move flagged earlier in the week — a 55% spike in one week to around 0.52% — has since partially reversed to 0.47%. With availability this wide, short sellers face no structural pressure.
The mean analyst price target sits at $536.50, roughly 20% above the current price. Wells Fargo's Jason Haas raised his target to $590 following April earnings. Morgan Stanley and Mizuho hold more cautious targets of $489 and $521 respectively, both reflecting Neutral or Equal-Weight stances.
The bull case centers on Moody's Investors Service segment — projected 12% revenue growth, with billed issuance up 23% year-over-year. The bear case focuses on potential credit issuance declines and sluggish growth in Moody's Analytics.
Berkshire Hathaway remains the largest holder at 14.1% of shares. TCI Fund Management added over 1 million shares in the most recent quarter, bringing its stake to 8.2%.
Earnings land July 21. The options market is positioned for a positive surprise. The prior print in April produced a modest -1.6% one-day move — the options crowd is betting this time looks different.
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