IYW heads into mid-September with its most striking feature not in the short book — which remains thin — but in how decisively options positioning has flipped bullish over the past month.
The options story is the cleanest signal this week. The put/call ratio has collapsed to 0.34, nearly a full standard deviation below its 20-day average of 0.54, reflecting a notable shift toward calls over puts. That's a dramatic reversal from the late-August setup, when the PCR was running as high as 0.84 — near the 52-week peak of 0.97. The rotation happened fast: between August 26 and September 1, the ratio dropped almost in half, and it has held in the low 0.33–0.35 range all week. Options traders are not hedging this ETF right now; they are leaning into it.
The borrow market tells a complementary story: shorts have been quietly retreating. Short interest fell roughly 21% over the past month to around 0.55% of the float — a level so low it barely registers as a bearish signal. More telling is the swing in availability. Through early September, availability was tight, running below 60% for most of the period between September 1 and September 9, with a trough near 51% on September 7. That was a genuine squeeze on the lending pool. Then something shifted: availability exploded higher, clearing 200% by September 11 and sitting at 202% as of September 15. Borrow supply is now abundant relative to the shrinking short interest, and cost to borrow has dipped back under 1% at 0.96% — well below the 1.2% peak hit earlier in the month. The picture is one of short sellers reducing exposure and the lending market following them out.
The price action provides context. IYW is off 1.2% on the week and 2.1% over the past month, closing at $250.08 on September 15. That modest pullback follows a period of strength — a prior note flagged a 2.1% weekly gain driven by cooling inflation data and tech earnings momentum. The dip has not triggered a rush to hedge: the PCR has stayed low throughout the decline, suggesting options buyers see the softness as a buying opportunity rather than a warning. The ORTEX short score eased to 44.2 from a recent high of 48.1 on September 9, consistent with the broader retreat in short positioning.
Institutional ownership is broadly spread across wealth managers, with Morgan Stanley holding roughly 4.9% of shares and PGIM close behind at 4.6% as of end-June. Both positions are essentially flat, with minor trimming across most top holders — nothing that changes the structural ownership story for an ETF of this size.
The next inflection worth watching is whether the PCR remains compressed if the price continues to soften — a sustained divergence between falling prices and a low put/call ratio would be an unusual setup worth revisiting.
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