Copper miners are on a tear, and short sellers are fighting it every step of the way.
COPX — Global X's copper miners ETF — closed at $93.66 on Tuesday, up 7% on the week and 18.5% over the past month, a pace that has caught out the bears badly. Against that backdrop, short interest has risen sharply, not fallen. Shorts added nearly 50% more exposure in a single week, lifting SI to 10.4% of free float. That is the tension driving this week's note: the price is screaming higher while a growing contingent of investors is betting against it.
The short-side story is striking precisely because it has accelerated into the rally. Short interest climbed from roughly 3.8 million shares in late May to 5.65 million by June 2 — a jump of nearly 50% in seven trading days. The move began around May 26-27, when an abrupt step-change in shorted shares suggested fresh positioning, not gradual accumulation. At 10.4% of free float, the level is meaningfully elevated for an ETF of this type. That said, the borrow market does not yet reflect acute squeeze pressure. Cost to borrow ticked up 26% on the week to 0.54% APR — still a very cheap rate, well within the normal range for liquid ETFs. Availability has tightened dramatically but from a very loose base: it dropped from above 300% in late May to roughly 173% now, meaning there are still close to 1.7 shares available to borrow for every share already short. The shorts can add without fighting a hard-to-borrow constraint — for now.
Options sentiment tells the opposite story to short interest. Call demand has surged relative to puts, with the put/call ratio at 0.31 — roughly 1.25 standard deviations below its 20-day average of 0.49. That is close to the most bullish options posture seen over the past year (the 52-week low is 0.15). Buyers of calls are expressing confidence that the rally in copper miners has further room. The divergence between a rising short book and a call-heavy options market is the clearest signal in the data: two groups of investors disagree sharply on where this ETF is heading.
The macro backdrop lends ammunition to both sides. Copper's bull case rests on electrification demand — grid buildouts, EV supply chains, and AI data centre power infrastructure all consume the metal in scale. The ECB this week confirmed gold has overtaken US Treasuries as the world's top reserve asset, a detail that reflects broader commodity re-rating as investors diversify away from dollar assets. That sentiment backdrop tends to lift hard-commodity miners alongside precious metals. The bear case points to Chinese demand uncertainty. China accounts for roughly half of global copper consumption, and growth there has remained uneven; any disappointment in industrial activity data would pressure the miners held inside COPX without any of the cushion a diversified materials ETF might offer.
The short-score reading of 54.5 — mid-range on ORTEX's 0-100 scale — reflects this ambiguity. It has risen from the low-40s in mid-May as SI climbed, but it stopped well short of a high-conviction short signal. Availability remains comfortable enough that the shorts face no immediate mechanical pressure to cover. What changes the calculus is a sustained move in copper spot prices: if the commodity holds recent gains, the short book at 10.4% of float represents real mark-to-market pain, and any acceleration in call volumes would flag that the squeeze risk is building.
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