SOXL has just posted one of the most violent two-week recoveries in its history, but the short side isn't backing down quietly.
The Direxion Daily Semiconductor Bull 3X ETF gained 13% on Tuesday alone and is up 32% on the week, closing at $144.16. Over the past month, the fund has more than doubled — up 173%. That kind of move in a leveraged product draws every type of participant: momentum chasers buying into strength, and short sellers who see the rally as an opportunity to reload at higher prices.
The tension in the lending market tells the more interesting story. Availability has tightened materially: the borrow pool is now only around 29% available relative to total short interest, well into the "tight" range and down from levels seen in early April when the fund was in free-fall. That compression followed a surge in short-selling on Tuesday — estimated short interest jumped 23.5% in a single session to 13.3 million shares, roughly 3.9% of free float. One day earlier, short interest had been 10.8 million shares. Bears piled in fast after the price spike. Cost to borrow has actually eased week-on-week, dropping 23% to 2.27% APR, suggesting the borrow crunch has not yet become painful enough to deter new entrants. But the trajectory of availability bears watching: if the tightening continues as shorts build, financing costs could follow.
The options market is not adding urgency to that picture. The put/call ratio at 1.10 is basically in line with its 20-day average of 1.09, producing a near-zero z-score of 0.17. Persistent puts have been the norm for SOXL for months — the 52-week PCR high was 1.24 and the ratio has rarely dipped below 1.0 — so today's reading reflects a structurally hedged holder base rather than any fresh defensive rotation. Options traders are not materially more defensive than usual despite the dramatic price action.
The ORTEX short score sits at 62.4 out of 100, having bounced from a recent low of 58.7 at the start of the week. A score above 60 places SOXL in the upper third of the short-squeeze risk spectrum — not extreme, but elevated relative to the range it has occupied through most of April. The underlying driver is the combination of modest availability tightening and rising short interest against a fast-moving price. The score peaked near 64 in mid-to-late April when the stock was lower and shorts were heavier (17+ million shares), so the current reading reflects a rebuilt position rather than the largest concentration of the past six weeks.
The broader context matters for a 3× leveraged semiconductor product. The fund's short interest was dramatically higher just five weeks ago: on March 31, estimated short shares totalled 28.1 million, more than double the current level. That overhang was worked down as the underlying Philadelphia Semiconductor Index stabilised, and the price explosion since mid-April has forced covering. What remains now is a smaller but growing short position that has re-emerged precisely as the price recovered — the classic pattern of shorts adding exposure on strength after an oversold bounce. Availability tightening at 29% against that backdrop is the metric to track. If it compresses further toward the sub-10% range, the cost to borrow will likely follow, and the setup shifts from "comfortable short" to "squeeze candidate" regardless of the macro picture driving semis.
The next reading to watch is whether the Tuesday short build — the biggest single-day increase in weeks — sustains through end of week or reverses as the price consolidates above $140.
See the live data behind this article on ORTEX.
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