Shinhan Financial Group is sending a contradictory signal. Short sellers are cutting positions sharply. Yet borrowing costs have climbed more than 70% in a week. Now options traders are adding puts at the fastest pace in two weeks.
Short interest in SHG has fallen roughly 43% over the past month — from around 358,000 shares in mid-April to ~194,000 as of May 19. That is a significant unwind. The April buildup has been almost entirely reversed.
The borrow market tells a different story. Cost to borrow hit 2.90% on May 15 — the highest level since early May — before easing back to 2.02% by May 19. That still represents a 12% rise week-on-week and a 20% rise over the month. Fewer shorts are in the trade, but those who remain are paying more to stay there.
Availability is not the explanation. At 7,252% of short interest, the lending pool is extremely loose. Over 7.2 million shares are available to borrow relative to the ~194,000 currently lent out. Tightness in the borrow market is not driving the cost move. Something else is repricing the risk of holding a short position here.
The put/call ratio for SHG options hit 0.3228 on May 20. That is a two-week high and sits +2.05 standard deviations above the 20-day mean of 0.2741. The absolute level remains low — the 52-week high is 7.85, so this is far from extreme positioning. But the direction of travel matters. Relative to recent norms, put demand is building at an above-average rate.
The stock is down 7.1% over the past month and gained just 1.6% on Wednesday. The next earnings event is July 24. Options traders have nearly two months to position.
Capital Research and Management added 5.3 million shares in its most recent filing as of April 30 — the largest disclosed change among major holders. BlackRock added 425,000 shares over the same period. These are constructive moves from large institutions, and they sit alongside the insider buying pattern noted in recent coverage: insiders have consistently purchased on dips through March and April.
The divergence between institutional buying and rising borrow costs is the tension worth watching heading into the July earnings print.
What to watch: Whether the put/call ratio continues rising through June, and whether borrow costs stabilise or push back toward the May 15 peak of 2.90%.
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