Three articles in five days have tracked an extraordinary collapse in XLV borrow availability. The latest data shows that collapse has partially reversed. Availability has recovered to 10.7% from the 18% low flagged on September 25 — but read that number carefully. It is still the tightest level in 52 weeks. The lending market for this healthcare ETF remains structurally constrained.
The September 25 note set a 52-week low in availability at 18%. That figure now stands at 10.7% — which sounds like further tightening, but the data as of September 24 confirms this is the new 52-week low, not a recovery. Every data point this week has reset the floor.
Cost to borrow has eased from the intra-week spike of 1.20% back to 0.76% as of September 24. That is still 20% above where it was a week ago and 33% above a month ago. The retreat from the peak suggests some short sellers covered or lending supply briefly widened. It does not signal a return to the loose conditions of August.
Short interest pulled back marginally. As of September 24, SI stands at 7.5% of free float — down slightly from the 7.9% reported on September 22 but still up 45% on the month. The one-month build from ~14.6 million to ~19.6 million shares borrowed is not unwinding. It is consolidating.
The put/call ratio sits at 1.62 against a 20-day mean of 1.53. That is not extreme — the z-score is just 1.1 — but it has moved in one direction for three weeks. At the start of September, the PCR was 1.44. It is now running consistently above the rolling average. Options traders are adding put exposure at a pace that tracks the short-interest build.
The short score dipped to 61.4 on September 24, fractionally below the 61.5 recorded on September 23. It peaked at 62.1 on September 22. The score is off its high but remains well above the 56–57 range that prevailed through most of September. The plateau at elevated levels — rather than further escalation — is consistent with a market that has absorbed the initial positioning shock and is now watching for the next catalyst.
Watch: Whether availability holds above 10% or breaks lower — that level separating from the floor would be the next structural signal in this borrow market.
See the live data behind this article on ORTEX.
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