Options traders are buying more puts on Dominion Energy ahead of its September 3 earnings date. At the same time, short sellers have been aggressively covering. The two signals point in opposite directions — and together they define the setup heading into next week.
Short interest dropped 18.3% over the past week to 2.61% of free float — the lowest level since early July. That is also a 19.3% decline over the past month. At 2.61%, the absolute level is modest. But the speed of the covering is notable. From August 18 through August 25, roughly 5 million shares of short interest were closed out in two distinct waves.
This is consistent with the broader utility sector pattern flagged by ORTEX data earlier this month. Short sellers appear to be resetting ahead of the earnings print rather than pressing a directional bet.
The put-call ratio hit 0.58 on August 21 — a 52-week high. It has since eased to 0.42 as of August 26, pulling back toward the 20-day mean of 0.45. The z-score is now slightly negative at -0.77, suggesting the defensive positioning spike has already unwound somewhat.
The timing matters. The PCR surge came as the stock was down nearly 6% over the trailing month. Options traders were paying up for downside protection — even as short sellers were covering. The divergence suggests two different types of market participant reaching opposite conclusions about the near-term risk.
Since the August 19 TD Cowen upgrade to Buy (target $80, covered in a previous ORTEX note), Morgan Stanley has moved in the opposite direction. Analyst Stephen Byrd lowered his price target to $68 from $71 on August 21, maintaining Equal-Weight. That places his target below the current stock price of $66.91.
Truist holds a $66 target with a Hold. Against TD Cowen's $80 outlier, the consensus sits at roughly $71.82 — implying around 7% upside from current levels. The analyst community remains split between one conviction buyer and a cluster of cautious holders.
Availability is extremely loose at 1,428% — meaning roughly 14 shares remain available to borrow for every one already lent out. The borrow market places no meaningful constraint on short sellers. The cost to borrow ticked up 55% over the past week to 0.46%, reversing a month-long decline, but the absolute level remains very low. The CTB move reflects the mechanics of shorts covering (less borrow demand temporarily repriced) rather than any squeeze dynamic.
Key data — as of August 26/27:
See the live data behind this article on ORTEX.
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