SCO, the ProShares UltraShort Bloomberg Crude Oil ETF, has had a turbulent fortnight — and the data tells the story of a crowded bet that is rapidly unwinding.
The fund's price captures the arc perfectly. SCO closed at $6.35 on May 5, up nearly 3% on the day, yet down 9% across the week and 23% over the past month. That divergence — a brief daily bounce inside a relentless medium-term decline — reflects a crude oil market that has spent much of April grinding higher, squeezing anyone holding a leveraged short through this product.
The most striking data point right now is not the short interest level but the cost to borrow. Borrowing SCO has become dramatically cheaper since late March, when the cost ran above 13% annualised. It now stands at 1.55%, an 83% collapse over thirty days. That matters because it signals the squeeze dynamic that defined April is fading fast. When an inverse ETF is expensive to borrow, demand for the instrument itself is high — traders pile in, the fund's own shares become scarce, and the ETF premium can inflate. The reversal in borrow cost suggests that pressure has dissipated.
Availability tells the same story from a different angle. The lending pool looks relatively open: utilization has eased sharply to around 20%, compared to peaks above 78% in late April and a 52-week high of 100%. There is plenty of capacity for new positions in either direction, with no squeeze pressure visible in the mechanics of the borrow market.
Short interest in percentage-of-float terms is high in isolation — near 58% of the float — but for an actively traded inverse ETF this figure is largely a function of ongoing creation and redemption mechanics rather than a signal of directional conviction. The intraday swing is dramatic: shares short more than doubled in a single session on May 5 relative to May 4, after collapsing from a spike above 11 million shares on April 30 to just over 1.2 million on April 29. That volatility reflects ETF arbitrage flows, not a steady accumulation of bearish bets.
Options positioning has shifted meaningfully toward caution, though it is approaching rather than breaching extremes. The put/call ratio moved to 0.69, close to the 52-week high of 0.70 hit on April 28. That is roughly 1.3 standard deviations above the 20-day mean of 0.47. For a fund that spent most of March and early April with a PCR below 0.35, the recent jump is notable: options traders are hedging more actively now than at almost any point in the past year. The PCR chart shows a near-linear climb from March lows into the current range, tracking the fund's price decline with close fidelity.
The ORTEX short score has eased to 35.9, down from a recent peak of 59.7 on April 30. A score in this range places SCO in the lower half of the universe on short-squeeze pressure — consistent with the loosening borrow conditions and falling utilization. The pattern in the score history mirrors the volatility in the shares-short data: brief spikes to elevated readings followed by quick retreats, with no sustained build toward extreme territory.
The picture that emerges is one of repositioning rather than conviction. The sharpest bearish-crude trade through SCO appears to have peaked in mid-to-late March, when borrow costs were highest and utilization was fully stretched. Since then the unwind has been orderly but steep: cheaper borrow, lower utilization, a fund price down more than a fifth in a month. What to watch next is whether crude oil price direction stabilises — if oil retreats, flows back into SCO could rebuild quickly; if oil firms further, the recent unwinding of leveraged short positions through this vehicle has further to run.
See the live data behind this article on ORTEX.
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