MPC shorts retreat as options hedgers hold their ground

Why this matters: Short sellers are walking away from Marathon Petroleum. But options traders aren't convinced the selling pressure is over — and the Jefferies downgrade from yesterday still sits on the tape.

Shorts exit at pace

Short interest dropped 19.1% over the past week. It now stands at 2.35% of free float — near a one-year low.

That's a meaningful exit. In absolute terms, roughly 1.65 million shares of short exposure were covered in five sessions. The borrow market reflects that retreat clearly. Availability has surged to 3,011% — meaning there are roughly 30 shares available to lend for every one currently borrowed. The lending pool is effectively wide open.

Cost to borrow sits at just 0.43%, down 7.5% on the week. There is no crowding, no squeeze pressure, and no sign the bears who remain are paying a premium to stay short.

Options traders aren't following the shorts out

The put/call ratio tells a different story. It sits at 1.15 — near its 52-week high of 1.18 — and 1.88 standard deviations above its 20-day mean of 0.95. That's the most defensive options positioning MPC has seen in a year.

This divergence is notable. Shorts are covering. Options traders are adding downside protection. The two signals are pulling in opposite directions, and that tension hasn't resolved.

The stock closed Tuesday at $389.68 — down 3.2% on the day and 5.2% on the week. The one-month gain still sits at 8%.

The analyst reset continues

As reported yesterday, Jefferies downgraded to Hold and set a $413 target. That move cracked what had been a clean upgrade cycle. Goldman Sachs ($472), Morgan Stanley ($453), Raymond James ($445), and UBS ($450) all raised targets in the prior two weeks.

The consensus now sits at Hold — 5 Buys, 9 Holds, 1 Underperform. The spread between the most bullish target ($472 from Goldman) and the stock's current price ($389.68) implies 21% upside on the bull case. The Jefferies target of $413 implies only 6%.

Earnings are next on October 27.

Data summary

• Short interest: 2.35% of free float, down 19.1% on the week — near one-year low
• Borrow availability: 3,011% — abundant supply, no squeeze conditions
• Cost to borrow: 0.43%, down 7.5% on the week
• Put/call ratio: 1.15, z-score +1.88 vs. 20-day mean — near 52-week high
• Price: $389.68, -3.2% Tuesday, -5.2% on the week
• Analyst consensus: Hold (5 Buy / 9 Hold / 1 Underperform)
• Next earnings: October 27