Short sellers made their biggest move on DBC in months — and the timing lines up almost perfectly with a sharp weekly selloff in crude.
Short interest in the Invesco DB Commodity Index Tracking Fund nearly tripled between early and mid-May, jumping from roughly 786,000 shares to 2.71 million, pushing the SI % of Free Float from under 1.4% to 4.7% of float. That's a 163% increase over the past month. The move is notable precisely because DBC has historically attracted minimal bearish conviction — a prior note from late April flagged SI at just 1.9% of float with "limited bearish conviction." Something changed in the second week of May, and it coincided with a broader commodity rout.
The lending market tells a nuanced story alongside that short build. Availability is currently loose at 568% — meaning there are roughly five shares available to borrow for every one already lent out — but that picture has shifted dramatically over the past two weeks. On May 15, availability had compressed to just 72%, the tightest reading of the past year, as borrowers rushed for shares to short. Since then, the pool has reopened considerably, suggesting the initial wave of positioning has eased. Borrowing costs climbed steadily through May, reaching a recent peak near 1.44% before settling back to 1.08% — still roughly 59% above where they were a month ago. That cost trajectory is consistent with a burst of borrow demand that is now partially normalising.
Options traders are leaning the other way, and that contrast is worth flagging. The put/call ratio has dropped to 0.28, running below its 20-day average of 0.30 and close to the lower end of its 52-week range. That's not a defensive setup — it reads as relatively bullish relative to recent history, with call demand well outpacing put buying. The divergence between rising short interest and a call-heavy options book means the two positioning signals are pulling in opposite directions. Short sellers appear to be expressing a macro view on commodities; options traders appear unconvinced the fund stays lower.
The short score has been retreating. It peaked near 55 in mid-May and has eased to 43 by May 26, reflecting the improvement in availability and the partial normalisation of borrow costs. The direction of travel suggests the short thesis lost momentum even as the fund dropped 5% on the week to $30.03. That weekly decline follows a more muted month overall — up just 0.6% over 30 days — consistent with commodity prices grinding sideways before this week's sharp move lower in crude oil, which fell more than 5% on Wednesday.
The institutional picture offers some context. Wells Fargo and Bank of America are the two largest reported holders, at 5.6% and 5.1% of shares respectively, both as of March 31. Bank of America trimmed its position by 210,000 shares that quarter. Deutsche Bank cut by nearly 195,000 shares in the same period. Morgan Stanley moved the other direction, adding 261,000 shares. The divergence among large holders into a period of commodity weakness is worth watching — their next filings will show whether those repositioning moves continued into Q2.
With no scheduled earnings event and the fund's value driven entirely by commodity futures, the key variable to track is whether the crude-led selloff broadens to agriculture and metals — the other two pillars of DBC's index. A sustained decline across all three commodity buckets would likely test whether the short interest built in May has further to run, or whether the loosening availability already signals those positions are being unwound.
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