Options traders are paying up for downside protection on DIA. The put/call ratio reached 1.87 on May 26 — the highest in four weeks and 2.0 standard deviations above the 20-day mean of 1.77. That's a clear shift in sentiment for the Dow's benchmark tracker, even as the ETF itself sits at $505.25, up 2.6% over the past month.
The options signal doesn't arrive in isolation. It joins a borrow market that has been oscillating at elevated stress levels all month.
Earlier coverage flagged the extreme tightening episode around May 21–22, when availability collapsed to 17% and cost to borrow spiked toward 0.90%. Since then, both metrics have partially recovered. Availability has risen to 50.4% as of May 25 — still tight, but well above the 4.5% floor seen on May 14. Cost to borrow has pulled back to 0.64% from its recent peak, though it remains 49% above its level a month ago.
The pattern over the past two weeks is striking: availability has swung from 4.5% to 151% and back to 17%, then rebounded to 50%. This isn't a steady squeeze — it's a lending market under repeated demand shocks, resetting rapidly each time borrowers return or release shares.
Short interest has come off its recent highs. At 5.5% of free float as of May 25, it is down roughly 1.4% on the day and 1.4% on the week — but still 11.6% above where it stood a month ago. The month-long build remains the dominant trend. For a passive index ETF, 5.5% SI is meaningful. Days to cover sits at just 1.16, per FINRA data, so these positions are easily reversible.
Goldman Sachs trimmed 2.5 million shares in Q1, the largest reduction among top holders. Citadel cut its position by 1.4 million. Those moves predate the current hedging activity, but they suggest the institutional posture toward DIA has been cautious for some time.
Three distinct signals are now aligned: elevated options put demand, a borrow market that keeps tightening in repeated waves, and a short interest base still 11.6% above last month. None of these signals, individually, would be alarming for a major index ETF. Together, they point to sustained institutional demand for downside hedges against the Dow.
The ORTEX short score of 55 is moderate. The story here isn't about extreme short positioning — it's about the persistence of defensive activity while the underlying index trades near all-time highs.
What to watch: Whether the PCR reverts back toward the 1.77 mean, or continues climbing toward its 52-week high of 2.22 — and whether the borrow market's next tightening episode is sharper than the last.
See the live data behind this article on ORTEX.
Open DIA on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
