Annaly Capital Management enters its June 10 earnings call with short sellers actively covering positions — a notable contrast to the modest defensive tilt now visible in options markets.
The short-covering story is the clearest signal this week. Short interest has fallen 18% over the past month to just 2.1% of the free float, with the bulk of that move concentrated in the past seven days alone — a 7.7% weekly decline. The direction is unambiguous: bears who built positions in late April and early May have been steadily walking away. At 2.1% of float, the short position is not large in absolute terms, but the pace of unwinding is worth noting ahead of a catalyst event. The borrow market corroborates the story: availability is extraordinarily loose, with shares available to borrow running at 3,539% of current short interest — effectively unlimited supply — and cost to borrow is a negligible 0.39%. There is no squeeze pressure here, and no constraint on new short positions if sentiment were to sour. The ORTEX short score has drifted lower too, declining from 32.6 in late May to 31.4 today, suggesting the overall short thesis is losing momentum.
Options positioning tells a slightly different story. The put/call ratio has edged up to 0.86, running about 1.4 standard deviations above its 20-day average of 0.80. That is not an extreme reading — the 52-week range runs from 0.40 to 1.66 — but the direction of travel over recent weeks is clear: investors have been adding more put protection as the stock has drifted lower. has shed 6.7% over the past month to $21.30. Combined, the picture is one of cautious repositioning rather than outright bearishness: shorts are covering, but options traders are hedging more than usual into the print.
The Street remains broadly constructive. The analyst consensus is a buy, with a mean price target of $24.32 — roughly 14% above current levels. RBC Capital reiterated its Outperform rating and $25 target as recently as today, while JPMorgan maintained Overweight with a $24 target following last quarter's results in late April. UBS is the only notable holdout, sitting at Neutral with a $23 target it raised from $22.50 after Q1. The bull case centres on NLY's pivot toward Residential Credit — up 30% quarter-on-quarter and now 23% of dedicated capital — and the potential tailwind from bank capital deregulation, which could boost demand for Agency MBS and the company's mortgage servicing rights. Bears push back on the leverage dependency: the company runs at 7.3x, and any sustained compression in net interest margins hits equity hard. The dividend score ranks in the 96th percentile of the universe, reflecting the stock's income profile; forward EPS momentum is softer, ranking in the 25th percentile over 30 days and the 10th percentile on a 12-month forward basis.
Institutional ownership is concentrated in the usual passive names. BlackRock recently added 3.65 million shares and now holds 11.2% of the company, the largest single position on the register. Invesco added 3.84 million shares in the quarter through March, also a meaningful increase. On the insider side, CEO David Finkelstein sold 50,000 shares at $22.88 in late April — about $1.14 million — following February's award-driven activity cycle. CFO Serena Wolfe also sold 16,537 shares at $22.48 in early May. The 90-day insider net is positive in share terms due to the February award grants, but the recent open-market sales by the CEO and CFO at prices above the current $21.30 close provide a gentle reference point. Closest peer AGNC slipped 2.2% on the week, a slightly worse outcome than NLY's 1.4% decline, while ARR managed a 2.0% gain — a divergence that underscores how idiosyncratic mREIT returns can be in the current rate environment.
The June 10 earnings call is the obvious next focus point. Last quarter's print produced a 0.75% negative first-day move and a near-flat five-day outcome — a muted reaction by historical standards. Whether the accelerating Residential Credit build and the macro rate backdrop have shifted that calculus is what the market will be pricing around between now and next Wednesday.
See the live data behind this article on ORTEX.
Open NLY 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.
