CPER enters the week with copper bulls firmly in control — the fund has rallied 11.3% in five sessions and 12.7% over the past month, closing Tuesday at $40.44, as the industrial metals complex stages a broad recovery.
The short story here is one of rapid retreat. Short interest fell 21% over the week to roughly 5.8% of the free float — a meaningful unwinding that tracks almost perfectly with the price surge. Earlier in the month, short positions were building steadily through early May, reaching their recent peak around May 5. Since then, the rally appears to have forced covers. The pace of that unwind is the notable development: a drop of more than a fifth of short interest in a week is a sharp move for any ticker, let alone a commodity ETF.
The lending market reinforces that picture, though in a nuanced way. Availability has tightened considerably — the ratio of shares still available to borrow relative to shares already out on loan is running at just 31%, well inside the tight zone where new shorts face real friction in finding stock. That reading is far below where it was in early April, when availability was effectively uncapped. Borrow costs remain modest at 1.24% annually, up 17% on the week but still low enough not to pressure existing positions. The combination — tight availability, falling SI, rising price — points to a market where the short trade has become harder to maintain.
Options positioning tells a modestly more cautious story than it did a few weeks ago. The put/call ratio has drifted up to 0.21, about 1.4 standard deviations above its 20-day mean of 0.16. That's a mild uptick in demand for downside protection, but the ratio is still extremely low in absolute terms and nowhere near its 52-week high of 1.24. Options traders are broadly still positioned for further upside — they are simply hedging slightly more than they were at the start of the month.
The ORTEX short score of 57 sits in the moderate range, having eased from a recent high near 61 in the first week of May. That drift lower reflects the unwinding shorts and the loosening pressure on existing positions. Institutional ownership is spread thin across 73 holders, with Mirae Asset the largest at just over 3% of shares — a holder base consistent with a specialist commodity ETF rather than a heavily trafficked equity. The most recent addition of note is Steward Partners Investment Advisory, which reported a near-complete new position of around 76,000 shares as of end-March.
What to watch next is whether the copper price holds above recent highs. Short sellers have covered aggressively, availability is tight, and any renewed weakness in the metal would determine whether the remaining 5.8% short interest sees fresh additions or continues to unwind.
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