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Short sellers have added heavily to KD over the past month. Options markets are pushing back.
Short interest in Kyndryl Holdings stands at 15.1% of free float, up 11.4% over the past week and 18% over the past month. That is a meaningful and accelerating position. Yet the put-call ratio tells a different story: at 0.66, it sits 2.4 standard deviations below its 20-day mean of 0.72, the most bullishly skewed options positioning KD has seen in recent weeks. The divergence between the two signals is the most interesting thing happening here right now.
The week-on-week jump in short interest coincides with a sharp move in the cost to borrow. KD's CTB rate reached 0.50%, up 139% from a week earlier. The absolute level remains low by any standard, but the speed of the move reflects fresh demand for borrows. Days to cover stand at 8.3, based on the most recent FINRA fortnightly settlement data through September 30.
Availability remains ample. At 519%, the lending market is loose: there are roughly five shares available to borrow for every one already lent out. The 52-week tightest reading was 390%. Shorts are not facing any structural squeeze pressure from the borrow side.
The put-call ratio drop to 0.66 is notable because it is not a gradual drift. KD's PCR ran in a tight band around 0.73 for most of September and early October. The last two sessions broke sharply below that range. Call volume is outpacing puts at a rate not seen over the past 30 trading days, with the PCR now approaching the 52-week low of 0.57.
The short score sits at 64.9, broadly stable over the past two weeks, though it ranks in just the 8th percentile for short score rank among factor scores. EPS momentum over 30 days ranks at the 73rd percentile. The EV/EBIT factor scores at the 92nd percentile, pointing to a stock that screens as inexpensive on an earnings basis.
ORTEX puts the chance of KD moving from the Russell 1000 to the Russell 2000 at the December 2026 semi-annual review at 25%. The rank date is October 30. At the current price of $11.78, the stock needs to close above $13.11 to qualify for a Russell 2000 addition. That line is 11.2% above Monday's close. The same review carries a 25% probability of a Russell 1000 deletion, which would require $122M of tracker selling over an estimated 2.5 days of average volume.
Earnings are set for November 4, three weeks away. The last two prints each pushed the stock lower in the five days following: down 11% after August's result, and down 4.8% in the single-day move.
What to watch: whether the put-call ratio returns toward its 0.72 mean as earnings approach, or whether call buyers continue to diverge from the short sellers adding positions this week.
See the live data behind this article on ORTEX.
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