Short sellers have been piling into EWT at the fastest pace in months — even as the ETF bounced sharply on Tuesday — creating one of the more interesting divergences in the Taiwan equity space this week.
Short interest jumped 53% in a single week to 11.7% of free float, reaching 12.4 million shares by July 21. That move follows a 62% build over the past month, taking the position from around 7.1 million shares in late June to where it is now. The ORTEX short score has climbed steadily in parallel, rising from 50.0 on July 10 to 63.5 by end of Tuesday — its highest reading in this ten-day window. What's notable is that this accumulation of short positions happened through a period when EWT was trading lower, then accelerated into a session where the fund bounced nearly 5%. Shorts either got caught off-guard by Tuesday's rally or pressed the position into it.
The borrow market tells a more nuanced story. Availability has loosened sharply over the past week — moving from around 94% to 111% — meaning roughly one share is now available to borrow for every share already out on loan. That's a meaningful change from the tighter conditions seen through mid-July, when availability ran in the 90–100% range, and a world away from the 52-week trough of just 13.2%, which marked conditions of genuine lending-pool stress. At the same time, borrowing costs remain low at 0.45% annualised — down from a local peak near 0.87% in early July — meaning this is not an expensive conviction short. The combination of rising short interest and loosening availability suggests new shorts are entering an increasingly accessible borrow market, not a squeezed one. Positioning looks aggressive in volume terms, but comfortable in cost terms.
Options traders have not joined the bearish chorus. The put/call ratio is running at 0.48, essentially flat to its 20-day average of 0.47 and less than 0.2 standard deviations above it. In the context of a 52-week PCR range that spans from near zero to almost 9.5, this week's reading is unremarkable. The PCR was running notably higher — closer to 0.75 — through mid-June, when the tape was weaker. The fact that it has compressed even as short interest climbed suggests options market participants are not hedging with the same urgency that short sellers are expressing through the lending book.
Institutional ownership offers some context on who holds the other side of this trade. Tennessee's Department of Treasury is the largest disclosed holder at 8.3% of shares, though it trimmed 2.9 million shares in Q1. BlackRock added 1.85 million shares in Q2, lifting its position to 5.4% of the fund. BNP Paribas and HSBC's asset management arm also added meaningfully in Q1. Insider data is entirely stale — dating to early 2017 — and carries no analytical weight here.
What to watch: whether the 53% week-on-week short interest build was front-running a specific catalyst or simply a directional macro call on Taiwan equities — and whether the loosening availability now prompts further short accumulation or begins to reverse as positions are covered.
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