Olin Corporation heads into its July 30 earnings with a striking internal contradiction: short sellers remain dug in at elevated levels, yet options traders have abruptly abandoned the bearish stance that defined the prior two weeks.
The options shift is the most notable development since last week's note. The put/call ratio has collapsed from a 52-week high of 0.70 on June 17 to 0.43 — more than two standard deviations below its 20-day average of 0.62. That is a near-complete reversal in directional bias. Where options traders were buying downside protection at the most aggressive rate of the past year just days ago, they are now tilting distinctly toward calls. The move is sharp enough — a z-score of -2.0 — to suggest either a tactical hedge unwind or fresh speculative call buying into the stock's weakness.
Short interest, however, tells a different story. Bears have not blinked. Short interest remains at 12.6% of free float, flat on the week after the aggressive 37% rebuild documented here last week. The ORTEX short score has drifted only marginally, from 57.7 to 57.0, holding near its recent peak. Borrow cost ticked up another 5% on the week to 0.48% — still cheap in absolute terms — and availability is loose at 931%, so there is no mechanical pressure forcing shorts to cover. Days-to-cover from the FINRA data remains 7.04. The short position is sticky, not in retreat.
The stock has not given bears much reason to move either. OLN dropped another 10% over the past week to $21.46, extending its one-month loss to 17.5%. That decline is broadly consistent with chemical sector weakness: closest peer TROX fell 17% on the week, HUN lost 28%, and CE shed 10%. This is sector-wide pressure, not an OLN-specific collapse — though OLN's elevated short base means selling is amplified relative to peers with lighter positioning.
The Street has not materially changed its view since the last note. JP Morgan trimmed its target to $25 from $26 on June 18, maintaining Neutral — a marginal downward nudge that follows the stock's drift lower. The broader analyst consensus carries a mean target near $30, roughly 40% above the current price, with most firms clustered at Neutral. Morgan Stanley's Underweight with a $22 target is the most explicitly bearish flag among major houses. The bull case rests on a second-quarter volume and pricing recovery, particularly if the Freeport facility outage resolves cleanly. Bears counter with persistent headwinds in Winchester and CAPV, chlorine market softness, and an EV/EBITDA of 7.6x that is compressing alongside falling earnings estimates — the 90-day EPS momentum factor scores in the bottom 1st percentile of the universe, even as the 30-day reading has recently recovered to the 88th.
One institutional datapoint worth flagging: Dimensional Fund Advisors added over one million shares in the most recent reported period, a meaningful accumulation against the tide of selling. Hotchkis and Wiley remain the largest disclosed holder at 13.2% of shares. Neither suggests a broad institutional exodus, even as the short base has more than doubled from its May lows.
The next earnings print on July 30 now becomes the axis around which the OLN debate rotates — specifically whether second-quarter volumes and chlorine pricing delivered enough to narrow the gap between the Street's $30 average target and a stock trading near $21.
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