QQQ ends the week in a calmer place than the previous two notes described, with short interest continuing to shrink, the borrow market loosening materially, and the short score pulling back from its mid-September peaks.
The most consequential shift from the September 28 note is in availability. A fortnight ago this column described availability collapsing to 51% on September 18, the point at which every share in the lending pool was fully lent out. That squeeze has now substantially reversed. Availability has climbed to 183%, nearly double where it was at the start of this week and back to levels last seen in early September. Cost to borrow, which peaked at 0.89% on September 21, has fallen to 0.48%, the lowest since mid-month. The borrow market, which was the clearest signal of squeeze pressure two weeks ago, is now signalling the opposite: room for new shorts has reopened. Short interest itself is down 12.5% on the week to 64.5 million shares, equivalent to 10.0% of the float. The direction of travel is consistent and now confirmed across three consecutive data points.
Options positioning tells a slightly different story, and the contrast is worth noting. Put demand remains structurally heavy. The put/call ratio is 1.39, a fraction above its 20-day average of 1.36 and roughly 1.2 standard deviations above that mean. The ratio has drifted persistently higher since late August, when it was running near 1.19 to 1.21. It remains well below the 52-week high of 1.86, but the trend of rising put demand over the past month has not reversed despite the covering in short interest. Options traders are hedging; short sellers are stepping back. That is not a contradiction, but it is a divergence worth tracking.
The short score has eased alongside the covering, now at 61.3, down from a peak above 65 on September 21. That pullback continues the trajectory noted in the September 28 report. The score remains elevated on an absolute basis, reflecting the still-meaningful 10% float short, but its direction has shifted from escalating to moderating. The ETF itself is down 1.3% on the week to $737.93, giving back a portion of the prior week's gains, though the one-month picture remains positive at 3.0%. Wikipedia attention, the only alt-data signal available here, was running well below its 90-day average as of September 8, a reading that points to lower-than-usual retail interest in QQQ rather than any fundamental signal.
On the institutional side, the last reported holdings from June 30 show Morgan Stanley as the largest institutional holder at 3.3% of shares, followed by LPL Financial and Bank of America. Goldman Sachs added nearly 900,000 shares in the quarter to June, while Susquehanna trimmed by 2.5 million shares, a move consistent with the market-maker adjustments typical after periods of elevated hedging activity. Analyst data on QQQ is effectively unusable: the most recent price target on record dates to August 2008, and no recent changes are logged. The ETF's story is told through positioning data, not Street ratings.
The note to watch heading into October is whether put demand begins to fade as a lagging signal of the squeeze, or whether it firms further as the macro headwinds flagged last week, yields, geopolitical noise, and AI regulatory pressure, continue to reassert themselves against a fund that is now $6 lower than it was when the September 28 report went out.
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