Why this matters: Short interest in KORU — the Direxion 3X leveraged South Korea bull ETF — has collapsed by more than half in seven days. Options traders are shifting bullish at the same time. The borrow market is opening up rapidly.
SI hit 11.7% of float on June 23. That is down from 26.9% just one week earlier — a 56.6% drop in shares short.
The unwind has been sharp and consistent. Short positions peaked in mid-June near 492,000 shares. By June 23, that figure had fallen to 167,000.
The ORTEX short score reflects the shift. It stood at 69.3 on June 10. It has since dropped to 57.7 — a 17% decline in two weeks, signalling materially reduced bearish conviction.
Availability has swung from extremely tight to comfortable in just two weeks.
On June 9, availability sat at just 15% — fewer than one share available for every six already borrowed. That is a very tight lending market. By June 23, availability had risen to 256%. There are now roughly two and a half shares available for every one currently on loan.
That normalization is significant. It means the cost to borrow is rising even as short interest falls — a counterintuitive split that reflects shifting demand dynamics in a leveraged product. Cost to borrow climbed 84% week-on-week to 6.48%, up from 3.52% on June 16.
The most likely explanation: as the underlying Korea rally accelerated, some shorts covered and returned shares. New would-be shorts face a higher borrow cost to re-enter — a classic post-squeeze dynamic.
The put-call ratio dropped to 1.42 on June 23. The 20-day mean is 1.99. That puts the current PCR 2.2 standard deviations below average — the most bullish options positioning seen in over a month.
PCR has fallen steadily over the past two weeks. It was 2.27 on June 5. The shift mirrors the short covering and suggests options traders are positioning for further upside in Korean equities.
The ETF itself is down 23.8% over the past week despite the monthly surge in the underlying. That reflects the daily-reset decay mechanics of 3X leveraged products combined with the recent volatility.
See the live data behind this article on ORTEX.
Open KORU on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
