QQQ is at $746, up 2.2% on the week, yet short sellers have quietly notched their sharpest single-week position increase since the May rebuild began — a divergence that now defines the tape.
Short interest rose 21% in one week, climbing from 55.4 million shares to 67.2 million by Tuesday's close. That puts the position at 10.5% of the float — back near the early-May peak of 68.9 million shares that preceded the last wave of covering. The rebuild is brisk by any measure. Yet the borrow market tells a very different story about conviction. Availability has tightened sharply from 320% last week to 180% now, meaning the lending pool is filling up as new shorts enter, but at 180% there remains meaningful room before supply becomes constrained. Cost to borrow is running at just 0.43% — less than half the 0.92% it touched in mid-May — suggesting this is not a panicked or costly short to maintain. Bears are adding with ease and at minimal expense.
The options market, which had been the most reliable signal in QQQ's recent playbook, is telling a quieter story this week. The put/call ratio pulled back to 1.58 from 1.62 at the peak earlier in the month, running fractionally below its 20-day mean of 1.60. The z-score is a negligible -0.61 — roughly in line with where it stood when previous articles noted the structural elevation of put demand. Options traders are neither adding protection nor abandoning it. The ETF's 10% May gain, which was evident last week, appears to have done most of the work in convincing hedgers to ease off the accelerator. The short-score reading of 60.6 reflects this mixed picture — up from 52 at the end of the month but well below the 61-plus readings seen in late May before the mid-month covering wave.
The institutional footprint offers useful context. Morgan Stanley leads holders with 3.3% of shares, having added 5.5 million shares in the quarter to March. Susquehanna International added 4.3 million shares in the same period. Bank of America trimmed 2.7 million. The pattern is familiar for a liquid macro ETF: broker-dealers and market makers dominate the top of the register, with flows reflecting hedging books as much as directional conviction. None of this reads as an unusual institutional signal in isolation, but it reinforces the picture of a security where positioning is heavily influenced by professional hedgers on both sides.
What makes the current setup notable is the asymmetry between the price trend and the short rebuild. Last week's article flagged the 15.8% surge in short interest and a loosening lending market at 320% availability as signs that new shorts were entering with ease. Both of those conditions have now evolved: shorts have added another leg, and availability has tightened to 180% as supply gets absorbed. The borrow cost remains negligible, so there is no mechanical squeeze pressure yet. But if the ETF continues to grind higher while the short position remains near its multi-week peak, the squeeze arithmetic gradually improves.
What to watch: whether availability continues its compression toward the 100% mark — the level at which the lending market begins to look genuinely tight — and whether the PCR holds near its 20-day mean or re-accelerates toward the 1.62–1.65 range that characterised the most defensive stretches of the past month.
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