SPY is trying to stabilise after last week's Iran-Israel shock, but options traders have not yet returned the favour — the put/call ratio jumped sharply on Tuesday even as the geopolitical headlines momentarily cooled.
The clearest signal right now is in options. The put/call ratio hit 2.04 on June 9 — well above its 20-day average of 1.90 and nearly 1.7 standard deviations stretched in the defensive direction. The single-session spike from 1.77 on June 8 to 2.04 represents the sharpest one-day move in hedging demand since the week of May 15, when the ratio briefly touched 2.08 before retreating. The 52-week high is 2.40, so the market is not yet at peak fear — but the direction of travel on Tuesday suggests the post-shock re-hedging is not done. The week that began with Monday's geopolitical headlines ended with put buyers still active, not retreating.
Short interest tells a more stable story, and one that is now familiar. Short interest nudged down 1.2% over the week to 10.4% of free float — continuing the gradual grind lower that has been running since the peak around 12% in late April and early May. Month-on-month, the decline is 11%. That trend pre-dates the Iran-Israel escalation and appears broadly intact: shorts added through the tariff anxiety of spring are continuing to be trimmed even as the latest macro shock has introduced a new layer of uncertainty. The ORTEX short score held essentially flat at 46, right in the middle of the 0-100 range — neither signalling renewed conviction from bears nor a clean all-clear. Borrowing conditions remain the loosest they have been all year. Cost to borrow ticked up sharply on June 9 to 0.33% after running near 0.14%–0.16% mid-week, but even at that elevated level it is well below April's highs of 0.66%. Availability is extraordinarily wide at 1,650% — meaning for every share currently borrowed short, more than sixteen remain available in the lending pool. There is no squeeze pressure and no sign of a crowded short trade.
The ownership picture adds useful context on the institutional side. The March 31 13-F filings — the most recent available — show Morgan Stanley added over 11 million shares in Q1, and Jane Street built a position of more than 10 million shares in the same period. Both moves suggest large institutions were adding index exposure during the tariff volatility of early spring. Wells Fargo moved in the opposite direction, trimming roughly 11.6 million shares. Those flows pre-date the Iran shock but establish that the Q1 buyer base was broadly constructive, adding weight to the argument that the short-side reduction over the past six weeks reflects institutional sellers covering, not fresh bulls entering.
The week's price action reinforces the tension. SPY closed at $737.05, down 3% on the week and almost exactly flat on the month — meaning the entire recovery that the June 3 note described has now been given back. The stock is still above the April lows, but the $22 drop since last week's report arrived at the worst possible moment: precisely when defensive positioning had been most aggressively unwound. That timing makes the current put/call re-spike more meaningful than its absolute level suggests. Markets that lower their guard and then get hit tend to rebuild hedges more slowly and with more conviction.
What to watch: whether the put/call ratio retreats back toward its 1.90 mean in coming sessions — which would suggest the Tuesday spike was a one-day overreaction to geopolitical noise — or whether it continues climbing toward the 2.20–2.40 zone that marked the most defensive readings of the past year, which would confirm that the hedging re-build has genuine staying power.
See the live data behind this article on ORTEX.
Open SPY 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.
