SOXX fell 7.1% this week to $562.14 — and short sellers responded not by covering, but by adding more.
Short interest has climbed to 18.5% of free float, up from 16.8% when Thursday's 10.4% single-day drop hit last week. That's a 13% rise over the past seven days and 27% higher than a month ago. The position now stands at roughly 10.4 million shares — the largest accumulated short since ORTEX began tracking this build in early May. Bears have added through a 32% monthly rally, through the sharpest one-day selloff in recent memory, and are still adding into this week's partial recovery. That's not a tactical hedge. It's a conviction position.
The borrow market confirms the pressure is real. Availability tightened sharply mid-week, hitting 11.5% on Monday — meaning roughly one share remained available for every eight already lent out — before loosening slightly to 17.7% by Tuesday's close. For context, availability was 175% as recently as May 1 and above 100% as late as May 5. The pool has essentially drained in five weeks. Cost to borrow has more than doubled over the past month to 2.72%, up 70% in a single week. The absolute rate remains manageable for now, but the trajectory matters: lenders are pricing the scarcity. The 52-week availability floor is 0.43% — the market has been tighter before, and it got there fast.
Options positioning has eased slightly from last week's defensive extreme, but the put/call ratio remains structurally elevated. The PCR of 3.08 is below its recent peak readings near 3.57 but still well above the 52-week low of 1.28. The ratio has held above 2.9 for almost the entire month of May and into June, a sustained hedge that reflects portfolio managers using SOXX puts as a chip-sector insurance policy rather than a clean directional bet. The slight drift lower in the z-score — now at -0.6 versus its 20-day mean — suggests the most acute options anxiety from last week's drop has faded, but the structural bid for downside protection has not.
The ORTEX short score has ticked up to 67.4, its highest reading in this run and up from 65.5 ten days ago. That incremental climb reflects the convergence of rising short interest, tightening availability, and elevated cost to borrow all moving in the same direction simultaneously. The previous notes in this series flagged the build at 7.55 million shares in mid-May and again at 9.44 million ahead of last Thursday's selloff. The position is now 10.4 million — bears are treating the price validation as confirmation, not an exit.
What to watch now is whether short interest continues to build through the $560–$570 range or whether the partial recovery off last Thursday's lows prompts the first meaningful covering. Availability at 17.7% leaves little room for new borrows to enter without pushing costs materially higher — the next leg of tightening, if it comes, will show up in cost to borrow before it shows up in availability.
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