Short sellers are stepping back from REMX. Yet options traders are placing their most bearish bets in a year. The two signals point in opposite directions — and the gap between them is the story.
Short interest in REMX has fallen sharply. Positions dropped 16.8% over the past week to 5.3% of free float. That is the third consecutive weekly decline.
The borrow market confirms the retreat. Cost to borrow has fallen 50% in one week to 0.69%. That is the lowest level recorded. Availability has swung from very tight to comfortable. It now sits at 179% — meaning roughly 1.8 shares are available to lend for every share already borrowed. As recently as early August, availability was as low as 22%.
The direction of travel is clear. Shorts are covering, the borrow pool is opening up, and the cost of maintaining a short position is near zero.
The options market is not following that script. REMX's put-call ratio hit 0.78 on August 21 — the highest level in 52 weeks. It is 3.3 standard deviations above its 20-day mean of 0.67. That is extreme by any measure.
Put buying at this scale, during a period of active short covering, suggests some market participants are rotating out of direct short exposure and into puts instead. Downside hedging is rising even as traditional short interest falls.
REMX has gained 18% over the past month. The ETF tracks rare earth and strategic metals companies — materials central to defense technology and clean energy supply chains.
That rally explains both signals simultaneously. Short sellers covering into strength pushes the stock higher and closes their positions. But options traders, uncertain whether the rally can hold, are buying insurance via puts. A 3.3 standard deviation move in PCR is not noise. It reflects real conviction that downside protection is worth paying for at current levels.
The ORTEX short score has eased from 54.7 on August 11 to 52.0 today. That decline tracks the reduction in short positions and the loosening of the borrow market. At 52, the score sits near the neutral midpoint — neither signaling extreme short pressure nor its absence.
What to watch: Whether the put-call ratio normalises as shorts complete their covering, or whether it continues to climb — which would suggest options traders see something the covering shorts do not.
See the live data behind this article on ORTEX.
Open REMX on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
