Options traders at PFSI are loading up on calls even as short sellers add pressure — a split signal worth watching ahead of next month's earnings.
The put-call ratio hit 0.46 on May 7, the lowest level in 52 weeks. The 20-day average sat at 0.52. The z-score of -2.9 marks this as a statistically extreme skew toward bullish positioning. Analysts are cutting targets, short interest is climbing — yet options flow is moving the other way.
Three firms trimmed price targets this week. Keefe, Bruyette & Woods lowered to $108 from $115. Piper Sandler cut to $112 from $122. Wells Fargo dropped to $100 from $110. All three maintained positive ratings. The consensus mean target stands at $120.86 — still 36% above Thursday's close of $88.66.
That gap between the current price and analyst targets is wide. Options traders appear to be leaning into it.
Short interest rose 23.4% over the past month to 4.6% of free float. That's a meaningful build. The borrow market, however, remains very loose. Availability is ample — the lending pool shows no stress, with cost to borrow sitting at just 0.33%. That's down over 36% in a month, making it cheap and easy to establish new short positions.
Days to cover stand at 4.5 days per FINRA data. There is no squeeze dynamic present at current levels.
The ORTEX short score is 46 — mid-range, having edged up from 44.7 three weeks ago but not flashing extremes.
CEO David Spector sold just over $928,000 worth of stock on April 14. He had sold a similar amount in early March. These are modest in the context of his total holdings but represent a consistent pattern of trimming near current price levels.
On the institutional side, Millennium Management added 2.48 million shares as of late March — a significant new position. That adds a notable counterweight to the CEO selling.
Earnings are due June 3. The bull case rests on mortgage rate relief and refinancing volume. The bear case centres on MSR amortization headwinds and margin compression. The current P/E of 7.3x and P/B of 0.92x leave room for multiple expansion — if the macro cooperates.
Data summary
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