PNQI — Invesco's NASDAQ Internet ETF — has seen a sudden and sharp build in short-side demand over the past two weeks, a move that stands out against an otherwise calm positioning backdrop for the fund.
The short interest story here is the week's genuine tension. At just 0.40% of the float, the absolute level is tiny — this is not a heavily shorted vehicle by any measure. But the direction of travel is striking. Shares short have more than tripled over the past month, and the week-on-week reading shows a 262% jump. To be clear, that surge starts from a very low base: the share count went from roughly 15,000 to nearly 57,000 units. Even so, the rate of change is unusual for an ETF of this type, and it coincides with a meaningful tightening in the borrow market. Availability has dropped from a loose 6,000%-plus reading in early July — where borrow was effectively unlimited — to 301% now. That's still well within normal territory, but the speed of the compression is notable. The 52-week low availability reading is 39%, which was touched in mid-June, giving a sense of how much further the lending pool could tighten if demand continues. Cost to borrow has edged back up to 1.23% after a mid-July dip, though it remains comfortably below the 2%-plus levels seen through much of May and early June.
The ORTEX short score has moved in lockstep with this positioning shift. The score has climbed from around 29 in early July to 46.2 today — still below the 50 midpoint, but rising at a pace that implies the model is registering the demand-side pressure. A score approaching 50 on an ETF with sub-1% short interest and loosening availability is not, on its own, alarming. But it is a flag that warrants watching, particularly given how quickly conditions shifted in the last two weeks.
Options positioning offers little additional signal here. The put/call ratio is 0.125, barely above its 20-day average of 0.119 and well within one standard deviation. The z-score is a negligible 0.23. Call activity continues to dominate, meaning options participants are not expressing the same caution that the short-building data implies. The divergence between a rising short score and a call-heavy options skew is the key tension in the current setup — the two signals are not pointing in the same direction.
On the price side, PNQI is effectively flat on the week at $48.21, down less than a tenth of a percent, after a 5% gain over the past month. The fund's underlying holdings — concentrated in large-cap internet and e-commerce names — mean performance tends to track broader tech sentiment rather than fund-specific dynamics. No earnings catalyst applies to the ETF itself. Analyst and valuation data are either absent or stale for this structure, and the dividend history is years old, so neither adds to the current narrative.
The setup to watch is whether borrow availability continues tightening from here. A further drop toward the 39% level that marked this year's tightest reading would signal a more crowded short trade — and would make the contrast with the call-dominated options market considerably sharper.
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