UFO Borrow Market Tightens Fast as Short Interest Hits 40%

The Procure Space ETF UFO has seen a dramatic shift in its lending market over the past week. Short interest has climbed to 40.4% of free float — and availability has collapsed with it.

Short Sellers Pile In

Short interest sat near 5% of float as recently as late June. It now stands at 40.4%. That is an increase of more than 700% over the past month, with 13.3% added in the last week alone.

The speed of that build is unusual for an ETF. UFO tracks a basket of global space economy companies — satellite operators, launch providers, and space technology firms. Its relatively small float means position changes from a handful of active participants can move the needle sharply.

Borrow Market Dries Up

The surge in short demand has hit the lending pool hard. Availability has fallen to just 34.8% — meaning for every three shares already lent out, fewer than two remain available to borrow. A week ago, availability stood near 68%. Four weeks ago it was above 1,200%.

That is a near-total depletion of the lending cushion in under a month.

Cost to borrow has risen 64% in one week, reaching 3.16%. The borrow rate had been volatile but ranged between roughly 1.8% and 4.0% for most of June and July. The current move puts it toward the upper end of that range, reflecting tighter supply rather than any extreme premium — yet.

The 52-week low for availability on this name was 7.6%. That reading suggests the lending market can get considerably tighter from here if demand for borrows continues.

Options Tell a Different Story

One notable divergence: the options market is not aligned with the bearish short positioning. The put/call ratio is 0.24 — well below its 20-day average of 0.37. The PCR has fallen sharply over the past four weeks, from above 0.50 in early July to current levels near the 52-week low of 0.07.

That reads as call-heavy positioning. It does not corroborate the short sellers' thesis, at least in the options market.

ORTEX Short Score

The ORTEX short score for UFO stands at 63.4 — elevated, and broadly stable over the past two weeks. It has ranged between 58.7 and 63.5 in that window. A score in this range reflects meaningful short-side pressure relative to lending dynamics.

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What to watch: Availability is the key variable. At 34.8%, there is still borrowable supply. But if demand for shorts continues at the current pace and availability drops toward the 10–20% range, cost-to-borrow pressure would likely intensify materially. The divergence between short positioning and options sentiment is worth monitoring for resolution.

• SI % of Free Float: 40.4% (up 13.3% in one week; up ~700% in one month)
• Availability: 34.8% (down 49% week-on-week; 52-week low: 7.6%)
• Cost to Borrow: 3.16% (up 64% week-on-week)
• Put/Call Ratio: 0.24 (below 20-day mean of 0.37; z-score: –1.28)
• ORTEX Short Score: 63.4