TLT heads into July with a striking split: short interest remains historically elevated at over 16% of float, yet the lending market has loosened dramatically in just five days.
The standout story this week is the rapid easing in borrow availability. Availability has jumped from around 148% on June 25 to 386% by June 30 — nearly a 90% rise in a week. That means for every share currently borrowed, there are now nearly four still sitting in the lending pool available to take out. That is the loosest the borrow market has been since at least late May. Cost to borrow tells the same story: it has drifted back to roughly 0.46%, close to a six-week low and down from above 0.54% earlier in the month. The borrow is not expensive, and it is increasingly available. The pressure that characterised early-to-mid June has plainly eased.
Short interest itself has been fading. Shorts peaked near 104 million shares around June 8 and have since pulled back to roughly 92 million — a 6% reduction over the past week alone. At 16.6% of float, the position remains sizeable by any measure, and the official FINRA fortnightly figure corroborates the picture at 94.8 million shares with a days-to-cover of 4.3. But the direction of travel is clear: rate-bearish traders have been trimming, not adding. The ORTEX short score has followed the same arc, falling from a recent high of 68.6 on June 25 to 60.6 today — a meaningful moderation in the composite short-pressure reading over just five sessions.
Options positioning is notably calm against this backdrop. The put/call ratio has edged up to 0.70, slightly above its 20-day average of 0.69, but the z-score of 0.58 places it well within normal range. This is nowhere near the defensive extremes the market has shown at other points — the 52-week PCR high is 0.81. Traders are not piling into downside protection. The combination of easing borrow conditions, falling short interest, and neutral options positioning suggests the urgency among rate bears has cooled, at least for now.
On the price side, TLT closed June at $86.42, essentially flat on the week — up around 0.25% — after a 1.2% slide on the final day of the month. The one-month gain is modest at 0.77%. The ETF pays out monthly distributions, with the most recent at $0.336 per share in June, and the annualised yield at current price remains the core draw for holders on the long side. Analyst data in the snapshot is too stale to be usable. BlackRock, as the issuer, holds the dominant institutional position at around 5.4% of shares.
The next focus for TLT watchers is whether short covering continues at this pace — or whether rate volatility re-ignites demand for the short side and draws availability back down from its current generous levels.
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