IGPT, Invesco's AI and Next Gen Software ETF, presents an unusual split this week: short interest has collapsed to near nothing, yet the borrow market has tightened to its most constrained level of the past year.
The lending story is the week's standout. Availability has dropped to just 40.8% — meaning for every share currently lent out, fewer than half a share remains available to borrow. That is the tightest reading in twelve months, down sharply from 124.8% just one session earlier on September 14. The move is abrupt. Through most of late August, availability ran above 100%, even touching 227% on August 24. Something shifted this week. Cost to borrow has also climbed, reaching 2.92% — up 49% over the past month and the highest level in the 30-day window — reinforcing that lenders are not cutting fees into a looser market.
Short interest itself tells the opposite story. Measured shares short have collapsed 91% over the past week to just 0.18% of the float — a level so low it carries almost no directional signal on its own. The month-long unwind from roughly 347,000 shares short in early August to fewer than 20,000 today has been relentless and consistent. For an ETF of this size, the residual short position is close to noise. The curiosity is that borrow availability is tightening shorts exit — suggesting the demand side of the lending market may be shifting toward securities lending for other purposes, or that the pool itself has shrunk with the unwind.
Options positioning is firmly one-directional. The put/call ratio runs at 0.077, essentially at the floor of its 52-week range (low of 0.019, high of 0.604), and slightly below its 20-day average of 0.081. Holders of IGPT are not buying downside protection. The z-score of -0.71 confirms the PCR is running below its recent norm. For a fund that has shed 3.3% over the past week and 3.4% over the past month — now priced at $92.84 — the absence of hedging activity is notable. Investors appear to be sitting with the drawdown rather than protecting against further weakness.
On the ownership side, the most active institutional move in the last reported quarter was HighTower Advisors adding roughly 240,000 shares, bringing their total to 529,000. Susquehanna entered with a new position of 147,000 shares. Morgan Stanley added 119,000. These are advisory and broker-dealer names rather than conviction fundamental buyers, which fits the ETF wrapper — flows here reflect advisor allocation decisions more than bottom-up stock views. UBS remains the largest reported holder at 675,000 shares (5.97% of shares), but trimmed slightly. The ORTEX short score has drifted down from 49.9 at the start of September to 46.2 today, a modest easing that is consistent with the short interest collapse rather than any new pressure building.
What to watch next is whether the availability tightening persists or reverses quickly — if borrow remains constrained below 50% even as short interest stays negligible, it raises questions about the composition of the lending pool and whether the ETF creation/redemption mechanism is absorbing supply that was previously available to lend.
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