FYX, the First Trust Small Cap Core AlphaDEX Fund, has quietly developed one of the more unusual borrow stories in the ETF space — a fund up nearly 4% on the week with every share in its lending pool now fully committed.
The lending picture is the standout here. Availability has collapsed from effectively unlimited to fully used within six weeks. Back on May 25, availability ran at 3,464% — roughly 34 shares available for every one borrowed, a loose market by any measure. By June 30, that ratio had fallen to 181%: tighter, but still technically within normal range. Then on June 30 specifically, utilization hit 100% for the first time in the past year. Every share currently in the borrow pool is lent out. The 52-week low for availability was 44%, touched at some point in the prior year — the current reading is closing in on comparable territory. Cost to borrow has tracked this tightening. It doubled between June 26 (3.1%) and June 29 (6.3%), the highest reading in at least six weeks. A month ago, CTB was running near 4.7%. The jump is modest in absolute terms but notable given FYX is a plain-vanilla ETF, not a single-stock short target.
Short interest itself tells a more complicated story. The headline figure is only 0.35% of the free float — genuinely trivial for a single stock. But the directional move is striking. Shares short rose from roughly 2,300 on June 5 to a peak near 33,400 on June 24, a 13-fold increase in under three weeks. Since then, short positions have pulled back to around 28,700. The week-on-week change is still up 17%, and the month-on-month change is up 10%. For an ETF that would normally see flat or mechanical short interest, this kind of sharp build-and-partial-unwind pattern suggests tactical activity — likely hedging or an ETF creation/redemption arbitrage in the small-cap space — rather than a directional short thesis.
There is no analyst coverage, no earnings event, and no valuation multiples to assess for an ETF of this type. The ORTEX short score of 48.5 is broadly neutral, having crept up from 46.8 a week ago. Options activity is essentially zero — the put/call ratio has read 0.0 every day for at least six weeks, with a 52-week PCR high of just 0.17. The fund paid a $0.44 dividend on June 25, up from $0.20 in March, which may have influenced some of the short positioning mechanics around the ex-date. The price itself has performed well — up 0.7% on the day, 3.9% on the week, and 7.5% on the month to close at $144.30.
What to watch is whether the borrow pool refreshes or continues to tighten: if availability holds near current levels while short interest resumes building, the cost-to-borrow could move meaningfully higher — an unusual dynamic for a fund of this size and mandate.
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