Yesterday's note flagged a quietly tightening borrow market on FCUV. The data has moved again — and in the same direction.
The cost to borrow on this Fidelity U.S. value ETF hit 3.03% on June 23. That is a record high since ORTEX began tracking this name in May. It is also up 134% in one week — from roughly 1.30% on June 15 to where it stands now. For a passive ETF that typically generates little borrow demand, the pace of that move is the story.
Availability — the ratio of shares still available to borrow against shares already lent out — dropped to just 5.25%. That is a record low for this name. One week ago, availability was around 250%. It has collapsed in a near-vertical line. At 5.25%, there is roughly one share left to borrow for every nineteen already out on loan. The borrow pool is effectively exhausted.
Short interest itself remains very low in absolute terms — 0.31% of the free float as of June 23. That number alone would not merit attention. But the rate of change is harder to dismiss. Short shares are up 27% in one week and roughly 400% over the past month. For a passive ETF, demand for short exposure at this velocity is unusual.
The combination — rising short interest, a near-zero availability reading, and a cost to borrow at a new tracking high — points to a situation where demand for borrow has outrun supply. Whether that reflects hedging activity, ETF arbitrage, or something more specific to the fund's U.S. value equity exposure is unclear from this data alone.
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