Three distinct signals converged on THC Tuesday. Options traders turned sharply bullish, short sellers cut exposure at a record pace, and the borrow market sent an unusual signal — all on the same session.
The put-call ratio dropped to 0.95 on August 25. That's down sharply from the 20-day mean of 1.31. The move registers a -2.93 sigma deviation — aggressive call buying by any measure. For a stock that has spent months with a PCR above 1.30, the break lower is notable. It marks the first time in the trailing 30-day window that calls have meaningfully outnumbered puts.
SI % FF fell to 3.0% on August 25. That's a 15% single-session drop, the steepest on record in the current data window. Over the past month, short interest has fallen 31.8%. The absolute level — 3.0% of float — is modest. But the velocity of the exit is the story. Short sellers who built positions above 4% of float in mid-July have been steadily unwinding. That unwind accelerated sharply Tuesday amid what the market is calling a healthcare rally.
Cost to borrow spiked 490% over the past week to 0.31%. On its face, a CTB surge alongside falling short interest is contradictory. Fewer shares borrowed normally means cheaper borrows, not pricier ones. One explanation: lenders pulling inventory as the stock rallies, reducing supply even as demand falls. Availability remains extremely loose at 3,827% — roughly 78.5 million shares still available to borrow against a short position of 2.65 million. The CTB move is sharp in percentage terms but still low in absolute terms. At 0.31%, borrowing THC remains cheap.
Eight firms raised price targets following the July earnings print. Wells Fargo lifted its target to $281 from $231. UBS went to $308. Truist went to $290. The consensus target stands at $282 — just above the current price of $271.88. THC has gained 16.6% over the past month. The stock is up 41.3% year-to-date, well ahead of peers HCA (+4.1% past week) and UHS (+1.5%).
Institutional flows show active accumulation. Citadel added 1.35 million shares as of June 30. Arrowstreet added 1.04 million. T. Rowe Price added 1.04 million. Boston Partners added 598,000. On the insider side, the 90-day picture shows net selling of ~$11.5 million — the COO, CIO, and multiple directors sold into the rally. Insider selling at these levels is worth watching, though the scale relative to institutional buying is small.
What to watch: Whether the PCR holds below 1.0 into September — a sustained break from the 1.30+ regime would confirm a genuine shift in options positioning, not just a one-session anomaly.
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