OEF's Call-Heavy Options Shift Deepens Further

The bullish options rotation flagged in last week's note has intensified — the put/call ratio on OEF has now dropped to its most call-skewed reading in over a year.

Options positioning has moved further in the same direction since the July 17 note. The put/call ratio fell to 0.95 on July 21, down from 1.70 just four days earlier. That reading is 2.24 standard deviations below the 20-day mean of 2.53 — the most bullish options setup for OEF in the past 52 weeks, with the low end of the annual range sitting at 0.59. As recently as early July, the PCR was above 3.0. The pace of the rotation toward calls has been unusually sharp.

Borrow costs have eased from last week's peak but remain elevated. Cost to borrow was 1.74% on July 17 — the spike that drew attention in the prior note. It pulled back to 1.34% by July 21, still up roughly 46% from a week ago and well above the sub-0.90% levels that dominated late June. The lending pool remains loose. Availability is running at 832%, meaning there are more than eight shares available to borrow for every one currently lent out. That has tightened from last week's 1,819% reading, but in absolute terms the borrow market is far from stressed. Short interest is negligible at 0.20% of free float and carries no meaningful signal for an ETF of this scale.

The ORTEX short score for OEF ticked up to 34.8 on July 21, recovering from a dip to 28.1 on July 16. The move higher reflects the recent uptick in borrow cost and short interest, but the overall score remains firmly in the lower third of the range — consistent with a name where short-side positioning is structurally thin. The combined score of 34.8 tells the same story: this is not a stock under meaningful short pressure.

Institutional flow data, current through March 31, shows the top holder — Managed Account Advisors — trimming slightly by 45,490 shares, while Bank of America and ClearArc Capital added to positions. Morgan Stanley cut its holding by over 1.2 million shares. These are Q1 figures and predate the recent market moves, so they provide context rather than fresh signal.

The next thing to watch is whether the call-heavy positioning holds into next week or whether the PCR mean-reverts back toward its 20-day average near 2.53 — a gap this wide between current and recent-average readings has historically closed fairly quickly on OEF.