RDVT Short Sellers Reverse Course Days Before the Print

Red Violet heads into its August 14 earnings report with the short-selling picture having changed dramatically since the bullish preview published just five days ago — a sharp reversal that now adds a new layer of tension to an otherwise call-heavy options market.

The story has flipped on short interest. The previous article noted bears quietly covering through July, with SI easing to 5.7% of the float and borrow availability at nearly 1,949%. That picture no longer holds. Short interest jumped roughly 47% in a single session on August 7, climbing to 8.3% of the float — the highest reading in the 30-day history. Simultaneously, borrow availability collapsed from above 2,000% to 212%, its tightest reading of the past year. That is still a loose market in absolute terms, but the speed of the tightening is striking. Cost to borrow doubled over the week to 0.88%, and the ORTEX short score surged from the low 40s to 64 — a level that ranks in just the 10th percentile for short score relative to the broader universe, meaning bears are now materially more engaged than most stocks. Something changed in the borrow market on August 7, and the timing — three trading days before the print — is notable.

The options market, however, hasn't followed. Call positioning remains extreme. The put/call ratio is 0.059, barely above its 52-week low of 0.054 and still roughly 18 calls for every put. That reading is slightly below the 20-day average of 0.078, not above it — options traders show no sign of hedging. B. Riley Securities reinforced the bullish case on July 30, raising its price target from $65 to $81 while maintaining its Buy rating. The consensus mean target of $71.50 sits modestly above the current price of $65.65, after the stock pulled back roughly 4% over the past month. Those numbers hang together — there's no stale-data concern here.

The earnings reaction history adds further context. The two most recent prints produced moves of roughly -4.5% and -4.8% on the day, before a much earlier event produced a 21% single-day gain. The pattern is not consistent, but the recent tendency has been negative. What Thursday's print will test is whether the surge in short interest reflects informed positioning ahead of a weak number, or simply mechanical rebalancing — and whether the call-heavy options market is right to stay so sanguine.