Bears and Squeezes Collide in Options Market

Two heavily shorted names are generating the loudest signals in US options markets today. Short sellers face extreme pressure in both IREN and Wolfspeed — and the setup is drawing attention from derivatives traders.

IREN, the bitcoin miner, carries 29.8% short interest as a percentage of free float. Shares available to borrow have collapsed to just 0.65% of short interest. ORTEX flags utilization at 100%. That combination — maximum borrow exhaustion, near-zero availability — is classic squeeze kindling. Options flow in high-short-squeeze-score names like IREN tends to skew bullish as traders position for a potential forced unwind.

Wolfspeed tells an even starker story. Short interest sits at a massive 74.9% of free float. Available shares to borrow: zero. The short score reads 74.7 out of 100. With 7.3 days to cover and borrow costs at 2.6%, the pain trade for shorts is clearly to the upside. Options markets in heavily squeezed names often see unusual call volume as traders bet on rapid reversals.

Away from the squeeze trade, analysts cut Palo Alto Networks today. The cybersecurity giant's RSI sits at 43.5 — drifting toward oversold territory. Despite an 81% gain year-to-date, the downgrade adds near-term uncertainty. That kind of analyst reversal on a high-flyer often draws defensive put activity in the options market.

Chewy is also in focus. Bears have been building positions — short score at 55.7, with the stock down 28% year-to-date. Traders watching this name should note that a sentiment reversal could trigger sharp call buying, especially with analyst upside targets averaging 28% above current prices.

Treasury yields climbing to multi-year highs add a macro layer. Rising borrowing costs tend to pressure high-multiple names and boost demand for protective puts across the broader market.

This is not financial advice.