AVO put/call ratio hit 0.48 on June 9 — a 4.2 standard deviation spike from its 20-day mean of 0.089. That's the highest PCR reading in 52 weeks. Options traders are buying puts at a rate not seen all year, even as short sellers rapidly exit the stock.
The contradiction is striking. Short interest has fallen 28% in a single week to 7.1% of float. Availability has exploded to 559% — up from around 125% just two weeks ago. The lending market is loose. Yet options participants are the most bearish they've been in a year.
The unwind is dramatic. SI peaked near 7.1 million shares in early June. By June 8 it had dropped to around 5 million. That's roughly 2 million shares covered in less than two weeks.
Cost to borrow briefly spiked to 2.0% on June 2 — more than double its prior range. It has since retreated to 0.81%. That brief squeeze appears to have accelerated covering. Availability surged in lockstep: from 126% on June 2 to 559% by June 8.
The ORTEX short score has also fallen sharply — from 73.6 on May 28 to 57.3 on June 8. It was signalling elevated bearish pressure just two weeks ago. That signal has now moderated substantially.
Despite the short-covering, the options market has moved in the opposite direction. The PCR jumped from 0.09 on June 8 to 0.48 on June 9 — a single-session move that pushed the z-score to 4.15. The 52-week PCR high is 0.891, so there is room further up, but the jump is significant.
Earnings may be the anchor here. AVO reported on June 8, with the stock moving +6.4% on the day. The stock is still down 17% over the past month. Analysts carry a consensus buy rating with a mean price target of $16.67 — roughly 53% above the current $10.87 close.
What to watch: Whether the PCR spike represents new bearish conviction or simply post-earnings hedging activity will become clearer over the next week. Short score direction and any further SI change are the key data points to track.
See the live data behind this article on ORTEX.
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