BBVA: The Bears' Retreat Continues

Spanish banking giant BBVA is seeing short sellers abandon their positions. Short interest plunged 37% over the past week to 1.7 million shares as of March 31. Days to cover sits at just 1.0, signaling minimal conviction among remaining bears.

The exodus follows extreme volatility in borrowing costs. Cost to borrow spiked to 24.3% on April 9 before collapsing 86% to just 0.56% by April 21. That dramatic swing suggests shorts faced intense pressure during the spike and rushed to cover. Utilization now stands at a low 5.3%, down from over 10% earlier this month and far below the 52-week high of 53%.

Options traders flip bearish

Despite the short covering, options sentiment turned sharply negative. The put/call ratio jumped to 0.85 on Monday, the highest since late March and significantly above the 20-day average of 0.19. The z-score of 2.70 indicates this is a statistically extreme move. Traders are loading up on puts ahead of earnings.

BBVA reports April 30 at 7:30 AM UTC. The options spike likely reflects positioning ahead of that release.

Price action remains weak

Shares fell 3.1% Monday to close at $22.47. The stock is down 4.8% over the past week despite the short covering. It remains up 9.4% over the last month.

The ORTEX Short Score sits at 27.5, down from over 41 on April 9 when borrowing costs peaked. The declining score reflects reduced short pressure.

Bears are losing confidence, but bulls haven't taken control. The elevated put activity suggests caution ahead of earnings.

This is not financial advice. ORTEX data may contain errors.