LATAM Airlines Group reports today against a backdrop of quietly rising short interest and a notable shift in options sentiment — two signals that, for once, are pointing in the same direction.
Short positions have climbed 14.7% over the past month to roughly 3.4 million shares, with an 8.1% jump in the last week alone. The absolute level is modest relative to peers, but the pace of accumulation — steady and uninterrupted since late March — suggests this is deliberate positioning rather than noise. The ORTEX short score of 45.3 ranks at the 87th percentile for short interest utilization, underscoring how much of the available lending pool is now engaged. Borrow costs have ticked up 22% over the past week to 0.775% APR, still inexpensive in absolute terms, but the directional move fits the broader story of growing short-side interest.
Options traders have moved in the same direction, but recently appear to be stepping back from peak defensiveness. The put/call ratio has eased to 0.99 from a high above 1.4 in early April — almost exactly in line with its 20-day mean of 1.08 — suggesting the heavy hedging that dominated during the tariff-driven selloff has unwound. The stock itself has had a rough month, off 6% to $46.26, though it clawed back 2.2% on Tuesday. That bounce comes after weeks of pressure, and options positioning no longer looks particularly alarmed.
Ownership adds a layer of complexity. The top three holders — Lauca Investments (13.2%), Delta Air Lines (10.6%), and Qatar Airways (10.6%) — collectively hold more than a third of the company and have not been meaningfully active sellers lately. Lauca did trim 24 billion shares in the most recent filing period, a move worth watching given its dominant position. The arrival of AFP Habitat, a Chilean pension fund, as a disclosed holder with a 5.9% stake is a notable recent development. Meanwhile, the valuation case looks reasonable: a trailing P/E of roughly 8x and an EV/EBITDA of approximately 4.9x are modest for an airline that generated nearly $3.8 billion in operating cash flow on estimated revenues of $16.3 billion.
The print will test whether LATAM's operational leverage is translating into margin expansion — or whether fuel costs, Latin American currency volatility, and softening premium demand are quietly eating into a recovery that the stock already has largely priced in.
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