HYDR — the Global X Hydrogen ETF — heads into mid-May with an unusual story: a short score that has collapsed from near-extreme levels in a matter of days, even as borrowing costs stay elevated and options traders have turned more bullish than at almost any point in recent memory.
The dominant narrative this week is one of rapid unwinding. HYDR's ORTEX short score dropped from 89.3 on May 6 to 41.5 by May 12 — a fall of 48 points in six sessions. That is not a gradual retreat. Short interest as a share of the float fell from an intra-period peak of around 170% higher than a month ago back toward calmer territory, with estimated shares short halving from roughly 362,000 on May 6 to about 57,500 by May 12. The ETF itself is up 3% on the week and more than 62% over the past month, closing at $64.53 on May 12 — a remarkable run for a hydrogen-sector fund that had been languishing.
The borrow market tells a more cautious story. Despite the sharp pullback in short positioning, the cost to borrow has barely moved. At 23.2% annualised, it remains close to double what it was in early April, when it was running around 11-12%. Availability has swung dramatically: a week ago the lending pool was heavily squeezed, with availability tightening to levels consistent with a near-exhausted borrow supply. By May 12 it had loosened sharply, with only about 2.9% of borrowable shares now actually lent out — down from a mid-week peak near 68.5%. That shift suggests recent short sellers exited quickly, freeing up the lending pool, but prime brokers have not yet reduced their borrow rates in response.
Options positioning adds another layer to the picture. Call activity is running far ahead of put activity, with the put/call ratio at 0.10 — almost four standard deviations above the 20-day mean of 0.053. That might sound defensive, but in absolute terms it remains very low, and the context is clear: HYDR's options market has been dominated by call buyers throughout the month, with the PCR only briefly spiking above 0.10 on May 12. The 52-week range for the PCR runs from 0.02 to 1.80, so even at the recent elevated reading the options market is nowhere near reflecting genuine downside demand. Traders appear to have been buying the hydrogen rally with calls, not hedging it with puts.
Short interest at 3.3% of the free float is not high enough on its own to drive the story, and the dramatic week-on-week decline of 57% confirms that the crowding that was visible in late April and early May has largely unwound. The mid-April through early May period saw short interest balloon more than sixfold — from around 20,000 shares to over 360,000 — coinciding with the ETF's sharp price appreciation. The reversal since then has been equally swift, suggesting those were tactical bearish bets rather than structural short positions. FINRA's most recent fortnightly figure of 86,140 shares (settlement date April 30) sits between the earlier extremes, offering a useful independent reference point that confirms the spike was real.
What to watch is whether the cost to borrow follows short interest lower. If prime brokers begin reducing the 23% annualised fee as the lending pool continues to free up, the last signal of lingering short-side conviction will disappear — leaving the ETF's near-term direction more cleanly driven by sentiment around hydrogen policy, fuel-cell names, and broader clean-energy flows.
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