COPX, the Global X Copper Miners ETF, enters July with a notable split: short sellers are covering aggressively even as the fund itself posts a bruising monthly loss.
The most striking move this week is the pace of short covering. Short interest dropped 13.8% across the week to reach 7.3% of float — down from a peak near 9.4% of float in mid-June. The retreat has been sharp and consistent, with covered positions unwinding across every session since June 22. On a single day — June 30 — short interest fell a further 7.4%. That kind of sustained covering into a declining price is unusual. The ETF is off 12.7% over the past month, yet those who were betting against it are pulling back. It points less to conviction in a recovery and more to shorts taking profits from a well-timed bearish trade.
The lending market reflects that unwind. Availability has loosened sharply — from a relatively tight 144% in mid-June to 244% now, meaning roughly 2.4 shares are available to borrow for every one already lent out. That's a clear loosening trend, and it tracks the covering pattern closely. At the same time, cost to borrow has doubled over the past month to 0.88%, though in absolute terms it remains low. The doubling matters more as a signal of renewed short-side interest in early June than as a practical friction today — borrow is still cheap and plentiful for anyone who wants to add a position. Options traders are not showing unusual caution. The put/call ratio is 0.30, slightly below its 20-day average of 0.31, and the z-score of -0.73 suggests call interest is running modestly above the recent norm. That's a mildly constructive read from derivatives.
The ORTEX short score at 47.9 sits in the middle of its recent range — down from 52.9 two weeks ago, when short positioning was more crowded. The direction of travel in the score mirrors the covering: the pressure that built through most of June is easing. That said, 7.3% of float remains a meaningful short base for an ETF. The bulls are not in control yet, and the shorts have merely retreated rather than capitulated.
The fundamental backdrop gives both sides something to work with. Copper futures broke back above $4.50/lb last week, supported by Chinese infrastructure data and supply-side concerns flagged across the ETF's major holdings — Freeport-McMoRan, Rio Tinto, and peers with direct copper production exposure. That catalyst likely accounts for part of the short covering. But the one-month price chart is still firmly negative, and a 1.6% single-day bounce on June 30 does not yet change that trend. COPX paid a $0.258 dividend in late June, providing a modest income backstop for holders navigating the drawdown.
The key tension heading into the week is whether the copper price bounce has enough momentum to sustain it. Short interest is falling, availability is loosening, and options positioning is tilted toward calls — but the month-long downtrend in the ETF is a reminder that the covering reflects shorts booking gains, not a clean fundamental reversal. Watch whether short interest continues its descent below 7% of float, and whether the copper futures rally above $4.50 holds as the primary test of whether the covering turns into something more constructive.
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