EWP, the iShares MSCI Spain ETF, enters the second week of May with one story worth telling: a dramatic unwinding of bearish positioning that has accelerated through April and into May.
Short interest has collapsed over the past two months. At its peak in late March, estimated shares short topped 2.1 million. By May 5, that figure had fallen to just 447,000 — a drop of roughly 79% over 30 days. As a share of the float, short interest now runs at just 1.5%, low enough that it is difficult to call it a primary driver of anything. The retreat is stark and steady: every week since late March has brought another leg lower in the short count, and last week alone saw a further 6.3% reduction.
The borrow market tells a compatible story, though the direction of travel in cost-to-borrow is worth a closer look. In mid-April, borrowing EWP cost borrowers upwards of 5.7% annualised. That cost has more than halved since then, landing at 2.3% on May 5. The easing is consistent with a lending pool that has loosened materially as shorts cover and return shares. Availability is no longer stressed. In early April, the 52-week high utilisation reading of nearly 90% pointed to a tight, pressured borrow market. Now, with utilisation back at just 2%, there is ample supply for anyone still wanting to borrow — the squeeze dynamic that was building in late March has fully unwound.
Options positioning offers a slight counterpoint. The put/call ratio has eased from its recent peak, dropping to 1.69 from readings around 1.94 across much of April. That still represents a put-heavy profile — well above a neutral 1.0 — but the trend over the past week has moved modestly in the direction of calls. The PCR z-score at -0.90 places the current reading somewhat below its 20-day mean, suggesting options traders are less defensively positioned than they were a few weeks ago, though not yet expressing outright optimism. The 52-week range for this measure is wide, stretching from a near-zero call-heavy extreme to a reading above 59, making the current level look relatively benign.
The ETF itself has performed well in the context of the short unwind. EWP closed at $56.22 on May 5, up 2.5% on the day and roughly flat over the week. The one-month gain of 2.5% reflects a broader European equity recovery, and the YTD gain of 4.3% places Spain's equity market in constructive territory relative to the early-year tariff jitters that rattled global indices. The ORTEX short score of 29.4 is low and has barely moved over the past two weeks, consistent with a ticker where short-side interest has structurally diminished rather than merely paused.
Institutional ownership skews toward long-term passive and quasi-sovereign holders. BlackRock added more than 4 million shares in Q1 2026, bringing its stake to roughly 22% of outstanding shares — a meaningful accumulation. The National Pension Service, Korea's sovereign wealth fund, holds the largest reported position at 28% of shares, with no change reported at end-2025. BBVA Asset Management and BMO Asset Management both appear as new positions in the reported period, adding small but fresh long-side flows.
The short unwind is now largely behind us. What matters from here is whether the constructive macro backdrop for European equities — and Spain specifically — can sustain the positive price momentum or whether the options market's residual put bias reflects lingering caution about a renewed turn lower.
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