The day after Sable Offshore Corp. crashed 56%, it bounced 43%. Now the options market is flashing its most bullish reading in months — even as the short position remains near record highs and the borrow pool has not reopened.
The put/call ratio dropped to 0.27 on July 1. That is 2.2 standard deviations below its 20-day mean of 0.31. It is the most call-heavy options positioning SOC has seen in months, sitting near the 52-week low of 0.20. The shift is sharp. Before the crash, the PCR was running above 0.33. Traders are now buying calls into the bounce — not puts.
This directly contradicts the direction of the short book.
Short interest hit 21.4% of free float as of June 30. That is up 19% on the week and 26% over the month. Shorts did not cover into the 56% collapse — they added.
The problem is the borrow market is now essentially closed. Availability stands at just 4.9%, down from 85% only one week ago. That is not a gradual tightening. The pool went from open to locked in two days. With availability near the 52-week floor of 2.3%, new short positions cannot easily be established. Existing shorts cannot easily be replaced if called in.
Cost to borrow has risen 80% over the past month to 1.31%. In absolute terms that remains low. But the direction is clear, and the pace has accelerated.
Roth Capital's Leo Mariani cut his price target on July 1 — from $22 to $15. He kept his Buy rating. The mean analyst target across coverage now sits at $18, against a stock trading at $4.40. That is a 309% implied upside. Even the most recently revised target sits 241% above the current price.
Benchmark had already downgraded to Hold in March. The remaining bulls are not abandoning the thesis, but they are steadily repricing the risk.
Three forces are now pulling in different directions. Options positioning says buyers are active. The short book says the conviction on the downside has not broken. And the borrow market says new short supply is almost entirely absent. Earnings are due August 12. That event, and any production update from the Santa Ynez Unit before then, will likely resolve the tension.
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