The dominant story in EWC this week is not what shorts are doing — it is what they are no longer doing.
Short interest in the iShares MSCI Canada ETF has collapsed by nearly 69% over the past month. It dropped from roughly 7.3 million shares shorted in mid-June to just 1.7 million by July 7, leaving short interest at only 2.6% of free float. That is not an aggressive bear thesis — it is the near-complete unwinding of one. The move happened fast: the sharpest step down came around June 24-25, when borrowed shares fell from above 6 million to below 1.7 million in a single session.
The lending market confirms this retreat is genuine rather than a short squeeze. Availability has ballooned — there are now roughly 13 shares available to borrow for every one currently lent out, an availability reading of 1,303%. That is well above the 52-week low of just 20%, which marked the tightest the borrow market got during the period of peak bearish positioning. Borrowing costs have drifted lower in parallel, easing to 0.85% from above 1.3% in mid-June. The ORTEX short score has also been drifting lower all week, ending at 31.9 — comfortably in the lower third of the range, reinforcing the read that short-side pressure has receded materially. Borrow conditions look loose, not strained.
Options positioning adds a layer of nuance. Put/call ratios on EWC are structurally elevated — the current reading of 6.28 sits well above the kind of ratio seen on individual equities, but this is common for country ETFs where institutional hedgers dominate the options market. Crucially, the PCR is barely above its 20-day mean of 6.12, with a z-score under 0.8. There is no unusual rush for downside protection this week. The 52-week range runs from 4.67 to 10.20, and the current level is comfortably in the lower half of that band, suggesting options traders are not particularly worried.
On the ownership side, BlackRock added a substantial 9.9 million shares as of June 30 — the largest single change among the top 15 holders, lifting their stake to 23.9% of shares outstanding. RBC Rochdale also added 2.3 million shares and Manulife Asset Management added 1.7 million. These moves suggest the institutional bid for Canadian equity exposure has been building rather than fading, consistent with the broader short-covering narrative. The fund's most recent dividend, at $0.28 per share, was in line with prior years, providing modest but steady income support for long holders.
The price itself has been quiet. EWC closed at $58.36, up 1.2% on the week and just 0.6% higher on the month — a range-bound grind rather than a directional move. There is no upcoming earnings event for the ETF itself, and analyst data on file is too dated to carry any weight. What to watch next is whether the short-covering stabilises at current low levels, or whether renewed macro concerns around Canada — trade, commodity prices, or CAD strength — bring fresh bearish positioning back into the lending market.
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EWC has entered a quietly contradictory patch: the iShares MSCI Canada ETF gained just over 1.3% on the week to close at $59.46, yet short interest jumped 33% in the same period — a meaningful divergence between price…
