AIPO — the Defiance AI & Power Infrastructure ETF — enters September with a striking contradiction at its core: short sellers have been aggressively unwinding positions, yet options traders remain deeply defensive.
The most dramatic story in this week's data is the collapse in short interest. Bears have cut their exposure roughly in half over the past month, with SI falling to 18% of free float from close to 40% in early August. The week-on-week drop alone was nearly 24%. That is a significant retreat from a crowded position, driven in part by borrow availability loosening from the extremely tight levels seen in late July — at their worst, availability dropped to just 20%, meaning for every five shares borrowed there was only one left in the pool. Availability has since eased back toward 54%, still in the tight-to-normal band but a marked improvement from the squeeze conditions that prevailed six weeks ago. Cost to borrow has drifted off too, easing roughly 13% over the month to around 1.5% — low enough that there is no meaningful friction for new shorts if sentiment were to shift.
The options market tells a sharply different story. Despite the unwind in short positioning, put demand relative to calls remains extreme. The put/call ratio is running at 8.8, well above its 20-day average of around 6.2. This is not a new development — the ratio spiked to a 52-week high of 11.5 on August 26 and has stayed elevated through the week. For an ETF, a PCR this far above its own 20-day norm points to persistent demand for downside protection, even as the most aggressive short positions are being closed. The z-score of just over 1.0 suggests the current reading is notable but not at the extreme of the recent range — the peak earlier in the month was the true stress point.
The price action adds context to the push-pull. AIPO closed September 1 at $27.66, down roughly 3.7% on the week and off about 3.4% over the past month. The ETF tracks two secular themes — AI infrastructure and power grid buildout — that have seen rotation and dispersion in 2026, with performance diverging sharply depending on whether a fund is weighted toward utilities or toward semiconductor and data center names. The ORTEX short score sits at 49.4, close to the neutral midpoint, reflecting the mixed signals: a materially elevated SI percentage even after the unwind, alongside availability that has genuinely improved.
What makes the current setup unusual is the directional gap between the borrow market and the options market. Short sellers are covering — that is unambiguous from a month of steady share reduction. But options flow suggests the broader investor base is not yet comfortable removing hedges. The next leg of this story will likely turn on whether the AI-and-power thematic continues to face sector rotation headwinds or finds a catalyst to pull options positioning back toward neutral, and whether the ongoing short covering accelerates further as availability stabilises.
See the live data behind this article on ORTEX.
Open AIPO 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.
