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UNG is telling a different story today than it was 48 hours ago: short interest has pulled back from last week's extremes and the lending pool has reopened noticeably, even as the fund itself continues to climb.
The shift in the borrow market is the clearest change since yesterday's note. Availability has risen to 57.4% of shares already borrowed, more than three times the 18.3% reading recorded on October 2. That is still tight by historical standards, and the 52-week low of 2.4% shows how severe the squeeze got, but the direction has reversed. Short interest has also retreated from its recent peak: after hitting 13.8% of free float on October 2, it has since fallen to 11.3%, a decline of roughly 18% in four sessions. The short position is still up more than 50% over the past month, so the bearish thesis has not been abandoned. Cost to borrow has eased to 1.17%, down from 1.59% at the October 2 peak, though still double the levels seen in early September. Borrowing is cheaper and easier than it was at the tightest point, but the lending market is nowhere near loose.
Options traders are not adding much conviction in either direction. The put/call ratio is running at 0.32, almost exactly in line with its 20-day average and barely a statistical blip from neutral. That ratio has ranged from 0.24 to 0.98 over the past year, so the current reading sits near the call-heavy end of the spectrum. There is no defensive hedging showing up in options positioning, which stands in contrast to the elevated short interest and the recent volatility in the borrow market.
The ORTEX short score has pulled back slightly from its October 2 high of 65.4 to 63.6, still elevated but no longer at the recent peak. That score reflects the combination of a meaningful short position, moderately tight borrow conditions, and a fund price that has risen 3.8% on the week to $10.74. Shorts who built positions at the start of October are sitting on mark-to-market losses as the fund has moved against them. The price gain, combined with the easing availability, raises the question of whether the most aggressive part of the short build is unwinding. The reduction in short shares over the past four sessions is consistent with that reading, though the overall position remains large relative to the float.
What to watch next is whether short interest continues to fall from the October 2 peak, or whether the partial unwind stabilises and bears attempt to rebuild as winter storage data and weather forecasts come into focus over coming weeks.
See the live data behind this article on ORTEX.
Open UNG on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
