COPX enters mid-July with a sharp tension between a powerful near-term price rally and a short position that, while retreating, remains meaningful against a backdrop of loosening borrow conditions.
The price move is the headline this week. COPX closed at $78.72 on Tuesday, up 5.9% on the day and 5.5% on the week, driven by surging copper futures on strong Chinese manufacturing data and supply-side concern from major producers. That single-day move is notable for an ETF. The one-month picture is less flattering — the fund is still down 8.4% over thirty days — which frames this week's bounce as a recovery from a bruising June rather than a clean breakout.
Short positioning tells a nuanced story. Bears have been scaling back: short interest has dropped 35% over the past month, falling from roughly 5.8 million shares in early June to 3.7 million, equivalent to 6.9% of the float. That is still a meaningful short book for an ETF. The week-on-week pace of covering has slowed — SI edged up 1.9% overnight Tuesday — suggesting the aggressive cover wave that ran through June has largely played out. The borrow market is relaxed. Availability runs at 559%, meaning there are more than five shares available to lend for every one already out on loan. Cost to borrow has ticked up 47% on the week to 0.52%, but in absolute terms that remains trivially cheap. The lending market offers no squeeze pressure here.
Options traders are tilting bullish, reinforcing the price action. The put/call ratio has dropped to 0.28, sitting roughly 1.2 standard deviations below its 20-day average of 0.30 — the most call-heavy reading in recent weeks. Against a 52-week range of 0.15 to 0.68, the current level is far from extreme, but the direction is clear: players are reaching for upside exposure rather than hedging against further declines. That bias is consistent with the thesis that June's selloff overdid the downside and this week's copper macro catalyst provided a credible re-entry point.
The ORTEX short score, at 38.8 out of 100 and drifting lower from a July 1 peak of 44.7, reflects the overall easing in short-side pressure. The score has bounced around the 37-44 range all month, never signalling extreme conviction in either direction. Combined with the comfortable availability and declining short interest, the short-side setup looks more like a fading trade than an active bear thesis. What shorts remain are likely macro hedges or pairs positions within the copper complex rather than directional bets.
The key variables to watch from here are the durability of the Chinese demand signal and whether copper spot prices can hold the gains that drove Tuesday's jump — COPX's fortunes are tightly tethered to both, and any reversal in the commodity would test whether this week's short covering was a genuine change of view or simply a squeeze on a thin summer tape.
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