EWC shorts retreat sharply as the borrow market stays loose

EWC, the iShares MSCI Canada ETF, enters the final days of October with the short-interest picture that dominated last week's note now moving in the opposite direction.

The reversal in short positioning is the week's defining development. Shares short fell 22% over the past seven days to reach 4.7% of free float, with a single-day drop of nearly 10% recorded on October 27. That unwinds a meaningful portion of the monthly build flagged in the October 21 note, when SI had climbed to around 5.9% of float. The monthly figure still shows a net increase of roughly 6% from late September levels, so the longer-term rebuild has not fully reversed, but the pace of short-covering this week marks a clear change in direction. The ORTEX short score has also drifted lower, sliding from 40.8 on October 14 to 36.2 by October 27, consistent with a market that is becoming less bearish on the fund at the margin.

The borrow market continues to offer no evidence of stress, and the loosening has become more pronounced. Availability now stands at 1,171%, up from around 1,005% a week ago and well above the 52-week low of 20%. With roughly 54 million shares available to lend against just over 3 million currently borrowed, there is ample capacity for new short positions if sentiment were to turn. Borrowing costs ticked up slightly to 0.50% annually, a rise of about 8% on the week, but remain firmly in low territory. The put/call ratio of 6.31 is marginally above its 20-day average of 6.23, a z-score of just 0.25, which signals that options positioning is essentially in line with recent norms, neither unusually defensive nor bullish.

Institutional ownership reinforces the picture of a fund whose primary audience is passive allocators rather than active traders. BlackRock holds 40.7% of shares, with its Schedule 13G/A filing from early October showing the stake grew from 19.7% to 26.1% over the course of 2026. FMR (Fidelity) crossed the 5% threshold in August and now holds 7.7%. Neither filing carries activist intent: both are 13G passive disclosures. As the disclosure note from ORTEX's own EDGAR data states, these stakes are as-last-filed, and holders dropping below 5% may not file again.

The ETF itself has moved little. EWC closed at $61.05 on October 27, up just 0.3% on the week and about 2.5% on the month. With no upcoming earnings catalyst for the fund itself, the short-covering dynamic and the continued looseness of the lending market are the main items to track as October closes.