PNQI ends September with the short-side retreat that was already underway a week ago now running at full speed, while the borrow market continues to send a contradictory signal.
The short-seller exit has accelerated sharply. Short interest has fallen nearly 39% over the past week alone, dropping to under 140,000 shares and representing less than 1% of the float. Over the full month the decline is 51%. That is a near-complete unwind of whatever bearish positioning had built up through August and into mid-September, when shares short were running close to 290,000. At sub-1% of float, short interest on PNQI is effectively noise. The ORTEX short score has tracked this shift, falling from 57 in mid-September to just 39 now, moving out of the moderate-conviction zone and into territory that flags very little directional pressure from the short side.
The borrow market, by contrast, has not followed the shorts toward calm. Cost to borrow has climbed to 2.9%, up 43% on the week and up more than 150% over the past month. That is a striking move for a liquid ETF. Availability tells a similarly volatile story: it briefly tightened to just 29% in mid-September, meaning barely one share was available for every three already out on loan, the tightest level of the past year. Since then availability has whipped back to 1,178%, meaning the lending pool is now effectively wide open relative to the residual short interest. The combination of near-zero short interest, loose availability, and a rising borrow cost is unusual and worth noting, though an ETF structure can produce these dislocations as authorised participants adjust creation and redemption activity.
Options positioning adds a further wrinkle. The put/call ratio has been zero for each of the past seven sessions, a run that pushed the ratio more than 1.3 standard deviations below its 20-day average of 0.09. Options flow, such as it is for a thinly traded ETF options book, has been entirely call-side. That is not a particularly meaningful signal given the low volume of PNQI options, but it is consistent with the broader picture of reduced hedging demand.
The price tells its own story. PNQI closed September 29 at $50.55, down 2.2% on the week and 5.3% over the past month. The fund tracks large-cap internet and e-commerce names, and the month's losses reflect sector-level pressure rather than any ETF-specific dynamic. What changed this week relative to the prior note is direction: the short unwind, which was already described as rapid seven days ago, has now essentially run its course. The borrow cost anomaly has deepened rather than resolved.
What to watch next: whether the borrow cost, now at a multi-month high despite near-absent short interest, starts to normalise as the lending market digests the reduction in shares on loan, or whether it persists as a quirk of ETF creation mechanics into the new quarter.
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