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QQQ has reversed the calm that the September 30 note described, with short interest building again, borrowing costs nearly doubling on the week, and options traders pushing protective demand to its most stretched level in months.
The previous note documented a meaningful squeeze unwind: availability had recovered to 183%, short interest had dropped 12.5% on the week, and the borrow market looked relaxed. That picture has now turned. Short interest climbed 3.3% on the week to 67.4 million shares, back to 10.5% of the float, erasing much of the prior week's retreat and sitting above the 10.0% level that the September 30 note marked as the trough. Borrowing costs rose 54% on the week to 0.65%, having been as low as 0.28% on October 1. That is still a low absolute rate, but the speed of the move is notable given the ETF's size. Availability has tightened from 245% at the start of the week to 155% by Tuesday's close, a 15% narrowing in five sessions. The 52-week low on availability was 25.9%, reached earlier in September when the lending pool was fully committed, so the current level does not signal stress, but the directional shift from loosening to re-tightening is the week's clearest change in the lending market.
Options positioning is the more striking data point. The put/call ratio reached 1.42 on Tuesday, more than two standard deviations above its 20-day average of 1.38, and its highest reading since the ratio peaked at 1.86 over the past year. That z-score of 2.2 places this week's defensive skew well outside the normal range of the past month. The move has been building steadily: the PCR was 1.19 in late August and has risen almost every week since. Demand for downside protection on the Nasdaq-100 has not been this elevated in relative terms since the September turbulence, when the borrow market was simultaneously stressed. This time the borrow market is looser, which makes the options signal a less obviously forced hedge and more of a deliberate positioning choice.
The short score has remained range-bound, closing at 62.2, broadly where it has sat since late September. That level is moderate rather than extreme, consistent with a market that is hedging rather than aggressively pressing a short thesis. The ORTEX short score peaked at 62.5 on September 23, just before the borrow market began to ease, and has not broken materially above that level since. The stability of the score against a backdrop of rising short interest and tightening availability suggests the new shorts being added are measured rather than momentum-driven.
On the ownership side, the most recent disclosed positions are from the June 30 quarter-end. Morgan Stanley trimmed its holding by 388,000 shares to 21.0 million. Goldman Sachs added 894,000 shares to reach 6.2 million. Rokos Capital entered the register with a new position of 5.7 million shares, the largest new institutional addition in the disclosed holder list. Susquehanna cut its stake by 2.5 million shares, the largest single reduction. These are now several months old and reflect a different price and market environment, but the Rokos entry is worth noting as a fresh institutional presence.
The ETF closed at $759.69, up 3.0% on the week and 5.7% on the month, so the price action and the positioning data are running in opposite directions: the fund is making money for longs while protective positioning is rising. What to watch next is whether the options put/call ratio continues to climb above the 1.42 level, and whether short interest consolidates above 10.5% of the float or retreats again as it did in late September.
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