TLT enters the end of September with the bear trade that reignited so forcefully earlier this week already losing momentum.
Five days ago, ORTEX data showed short interest hitting 112.8 million shares and borrow costs spiking to 0.63%. That picture has changed. Shorts trimmed positions into the week-end, borrow costs dropped sharply, and options traders rotated back toward calls. The bear trade has not reversed outright, but the intensity has eased.
The positioning story is one of partial retreat rather than full capitulation. Short interest ended Tuesday at 103.5 million shares, representing 18.6% of free float. That is still up 5.1% on the week and up 8.3% over the past month, so the structural short remains intact. What has changed is the borrow market. Cost to borrow has fallen 34% in one week to 0.41%, easing from the 0.63% spike logged on September 22. Availability has loosened dramatically, climbing to 858% as of Tuesday, nearly triple the 295% reading from the prior Monday. With roughly eight shares available in the lending pool for every one currently borrowed, there is no squeeze pressure in the borrow market at these levels. The ORTEX short score has also pulled back, dropping from a peak of 65.6 on September 24 to 54.7 by Tuesday, consistent with a cooling of the near-term bearish conviction.
Options positioning reinforces that read. The put/call ratio has dropped to 0.49, the lowest level in the past 52 weeks and almost 1.75 standard deviations below its 20-day average of 0.56. That marks a clear shift: traders who were paying for downside protection a week ago are now tilting toward calls. The move mirrors the cooling in short interest, both suggest the immediate pressure on long-duration Treasuries has at least paused.
The price has not recovered to match the positioning shift. TLT closed Tuesday at $78.23, down 5.6% over the past month and 4.3% on the week. The ETF pays monthly distributions, with the most recent at $0.31 per share, a function of the coupon income from the underlying 20-plus year Treasury portfolio. BlackRock Portfolio Management holds approximately 5.4% of shares per its April 13G filing. The largest reported holders are Managed Account Advisors with 8.6% and Northwestern Mutual Wealth Management with 7.8%, though Northwestern cut its position by 5.4 million shares in the most recent reporting period, while Bank of America trimmed by more than 21 million shares. Those moves pre-date the September short rebuilding episode and should be read as longer-term portfolio adjustments rather than a response to recent rate moves.
What to watch next is whether the short interest stabilises around the 18% to 19% of float level or begins another leg higher; the September 24 peak of 20.3% is the reference point for whether this week's trim marks a genuine unwind or simply a pause before renewed bearish positioning at the long end of the curve.
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