XLU ends the week in a notably different place from where it spent most of June — short interest has fallen to its lowest level in over a month, and the borrow market has shifted from crisis-tight to comfortably loose.
The short-covering story has continued to run. Short interest finished June at 9.8% of the free float, down 13.4% on the week and off more than 10% from a month ago. That's the lightest short position since early May, when the borrow market was approaching full exhaustion. The journey here was volatile. June 22 saw shorts near 11.3% of float with availability collapsed to 15.7%. The unwind that followed was sharp: two notes filed last week described the near eight-fold loosening in availability between June 22 and June 23. That reset has now stabilised. Availability ended the week at 154% — meaning more shares remain available to lend than are currently borrowed — and has held above 140% for four consecutive sessions. The borrow market is no longer telegraphing urgency in either direction. Cost to borrow has drifted back to 0.57%, well below the 0.81% peak on June 22, though still up roughly 28% on the week as the rate bounces off the mid-June lows around 0.34%.
Options positioning adds another layer of calm. The put/call ratio is running at 2.45, almost exactly in line with its 20-day average of 2.46 — a z-score near zero. That's a sharp contrast to late May, when the PCR was consistently above 2.65 and options traders were stacking protective puts in size. The drift lower over the past month tells a quieter story: options positioning has normalised as the macro anxiety that drove that defensive build-up has partially unwound. The 52-week PCR range spans from 0.86 to 182.78, so the current reading sits in the middle of what is evidently a wide distribution for this ETF — not a signal on its own, but consistent with the broader easing in positioning pressure.
The ORTEX short score ticked down to 51.1 — exactly the midpoint of its 0-100 range — from 56.1 on June 22. That modest compression mirrors the directional shift in both short interest and availability. A score at the midpoint reflects a balanced setup: no strong squeeze signal, but no complacency either. The short score had briefly climbed above 55 as the June tightening episode played out, so the retreat back to neutral confirms the unwind has been genuine rather than a temporary pause.
Consistency check on the analyst data: the price target in the snapshot carries an as-of date of August 2008 — nearly 18 years old — and implies a return potential of -35% from current levels. That data is not usable and has been omitted entirely. No recent analyst changes are recorded for this ETF, which is typical for a sector vehicle of this kind.
What to watch next is whether the short base finds a floor near the current 9.8% level, or whether the covering continues — at the late-May trough the short squeeze reached its fullest extension with availability at just 5.4%, and that episode was resolved by a fresh wave of short-selling that took SI back above 11%. With availability now back at 154% and cost to borrow subdued, the conditions for another rapid rebuild are in place if the macro or rates backdrop shifts.
See the live data behind this article on ORTEX.
Open XLU 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.
