Short sellers have been building positions in EWW at a notably brisk pace, even as the iShares MSCI Mexico ETF nudges modestly higher on the week — a divergence that makes the current setup worth examining closely.
The headline shift is in short interest, which has climbed 18% over the past week and is up nearly 30% over the past month, reaching 9.3% of free float. That is a meaningful level for an ETF, reflecting a genuine bearish conviction around Mexican equities rather than incidental positioning. The build has been consistent — short shares rose from roughly 1.86 million in late May to 2.70 million by month-end, a sustained accumulation rather than a single-day spike. Alongside that, the cost to borrow has drifted up about 10% on the week to 2.91%, and roughly 17% over the past month — still modest in absolute terms, but the direction is clear. Borrow availability has tightened to 36.5%, meaning only about one share remains available for every two already lent out. That is well into the tight range. The 52-week low availability reading was 17.4%, so there is room for further tightening if shorts continue to press.
Options positioning has shifted in the opposite direction, and the contrast is worth naming explicitly. After spending most of June with a put/call ratio running well above its 20-day average — as high as 1.42 earlier in the month — the PCR has dropped sharply to 1.03, more than 1.5 standard deviations below that same average. Options traders appear to be unwinding defensive hedges or rotating into calls at a faster rate than the broader market sentiment would suggest. The 52-week PCR range runs from 0.11 to 2.09, so the current reading is close to the middle of the historical band, but the speed of the recent compression is notable. Short interest and options are effectively pulling in different directions right now: one market is adding bearish exposure, the other is reducing it.
The ORTEX short score has been climbing steadily, reaching 66.0 — up from 62.7 two weeks ago. That trajectory reflects the combination of rising short interest and tightening borrow conditions. On the institutional side, the most recent 13F filings (as of March 31) show Morgan Stanley as the largest disclosed holder at 4.3% of shares, with a net addition of roughly 274,000 shares. JPMorgan added around 59,000 shares. Goldman Sachs Asset Management trimmed its position by 209,000 shares, and UBS cut by 324,000 — so among the larger names, there was a modest split between those adding and those reducing. D.E. Shaw built a fresh position of just over 102,000 shares, while Jane Street added 100,000. The 13F data is as of Q1-end, so it predates the recent acceleration in short interest that picked up pace in mid-June.
The macro backdrop hanging over EWW is worth keeping in mind. The ETF is down 4% over the past month despite a 0.7% gain on the week, and the recent dividend history — a $1.14 per share cash distribution announced last September — confirms the fund continues to pay out Mexican equity income to holders. Analyst price target data for EWW is extremely stale and has been omitted accordingly. The next development to watch is whether the short interest build continues to translate into tighter borrow conditions, and whether the options market — currently softening its defensive stance — begins to realign with the more cautious signal coming from the lending side.
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