SMTC: A Liquidity Proxy With Nothing Left to Short

The LYXOR Smart Overnight Return ETF, listed on the LSE under the ticker SMTC, is one of those instruments that generates ORTEX data almost entirely as a matter of mechanical completeness rather than genuine short-selling interest.

The lending market tells the clearest story here. Availability is effectively unlimited. The 9,999% reading reflects over three million shares available to borrow against zero lent out. Utilization has been flat at 0% for every session in the past 30 days. Nobody is borrowing this fund to short it. The ORTEX short score of 26.6, stable in a tight range since at least June, confirms the picture: this is one of the least contested instruments in the lending market.

Cost to borrow is the one metric that carries any texture. At 2.92% annually, borrowing costs have actually fallen sharply. They are down 14% on the week and 43% over the past month, pulling well back from the 4.4% peak seen in late April and the even higher 6.9% readings that briefly appeared in late 2025. The direction of travel is easing, but the absolute level still sits above what you would expect for a deeply liquid, uncontested instrument. That gap is worth noting: even where no one is shorting, the cost to access the borrow is not zero.

The fund itself has drifted higher. Priced in USD at 1,326.9 as of October 16, it is up roughly 7.5% on the week and 40% over the past month, a move that almost certainly reflects the overnight rate component compounding mechanically into the NAV rather than any market-driven revaluation. There are no analyst ratings, no earnings events, no institutional trading signals, and no factor scores to add further colour.

The key watch here is whether borrowing costs continue to normalise toward a level more consistent with the fund's effectively zero utilization, given that the current spread between cost and demand remains the sole anomaly in an otherwise inert dataset.