UNG Short Sellers Keep Running

The bear retreat in UNG has deepened further. Short interest has now fallen to 5.6% of free float, down 29% week-on-week. That extends the unwind flagged in last week's note, which itself had already pulled back from the July 14–15 peak near 10% of float.

This is no longer a one-week reversal. It's a structural shift in positioning across a fortnight.

The Numbers Behind the Exit

Short interest peaked around 5.7 million shares in early-to-mid July. The position now sits at roughly 2.7 million shares. That's a halving in under two weeks.

The cost to borrow has moved in lockstep. CTB stood near 2.85% on July 14. It has since collapsed to 1.18% — a 54% drop in a week. When shorts exit, demand for borrowed shares falls. The borrow rate reflects that directly.

Availability tells the same story from the other side. A week ago it sat in the tight zone. Today it's at 677% — meaning roughly seven shares are available to borrow for every one currently shorted. The lending market is as loose as it's been in months. The 52-week minimum for availability was 2.4%, so the current reading is a near-complete reversal of the squeeze conditions seen earlier this summer.

Options Add a Complementary Signal

The put/call ratio sits at 0.32, below its 20-day mean of 0.28. The z-score is below 1. That's a modest lean toward calls — consistent with the short covering narrative, but not extreme enough to be the dominant signal here.

The PCR hasn't pushed to its 52-week low of 0.24. Options positioning is supportive, not decisive.

Short Score Confirms the Shift

The ORTEX short score has moved from 63.4 on July 15 to 44.4 today. That's a 19-point drop in nine days. Scores above 60 flag elevated bearish pressure. The move below 50 marks a genuine change of regime in the data. Bears are not just covering — the aggregate short signal has reset to neutral.

What to Watch

The choppiness noted in last week's article hasn't entirely disappeared. The one-day reading on July 24 showed a 19% jump in shares short. Single-day volatility in the estimate series for a commodity ETF like UNG is common. The weekly trend — consistently lower — is the signal that matters.

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• SI % of FF: 5.6% (Jul 27 pulse) / 5.6% (Jul 24 data)
• SI change, 1 week: –29%
• Cost to borrow: 1.18%, down 54% week-on-week
• Availability: 677% (versus 52-week low of 2.4%)
• PCR: 0.32 (z-score: 0.98)
• Short score: 44.4, down from 63.4 on Jul 15