The dominant story in JETS right now is a rapid and sustained unwinding of one of the heaviest short positions in the ETF space — a squeeze-like retreat that has cut bearish exposure in half since early May, even as the price barely moved.
Short interest peaked near 29% of free float at the start of May, with roughly 16.6 million shares short. By June 9 it had fallen to 29% of a shrinking base — or about 8 million shares, down 51% over the past month and 23% on the week alone. That is a dramatic exodus from a crowded bearish trade. The speed matters: a single-day drop of 20% in short shares on June 9 suggests forced covering, not a gradual change of view. Bears who held through the ETF's 3.9% monthly gain have been squeezed out of positions they entered at higher short levels.
The lending market tells a story of genuine relief. Availability has loosened dramatically — from near-zero on May 19 (just 6% available relative to short interest, effectively fully lent out) to 82% today, a near sevenfold improvement over the week. Cost to borrow has come down from a peak above 8% in late May to just over 5%, easing the carry pain for any remaining shorts. The 52-week record shows availability hit essentially zero at its tightest point, so the current loosening is a meaningful structural shift, not just noise. At the same time, the options market is running a put/call ratio of 2.54 — elevated in absolute terms, but actually below its 20-day average of 2.73 and well off the 52-week high of 3.81 hit in mid-May. Options traders are still holding more puts than calls by a wide margin, but the defensive positioning has eased alongside the short covering.
The ORTEX short score sits at 69.8, down from a recent high of 71.6 on May 28. That reading is still firmly elevated, placing JETS in the upper tier of short-pressure names across the universe. The score has been declining for two weeks, tracking the unwinding of shares short. The direction of travel suggests the structural bearish thesis — essentially a macro bet against the airline sector recovery — is losing conviction among active short sellers, even if options traders retain a cautious tilt.
What to watch next is whether the short covering stabilises or continues: if the remaining 8 million short shares begin to cover further, availability should stay loose and borrow costs should drift lower — but any renewed negative catalyst for the airline sector could see the borrow market tighten again quickly given how thin the lending pool became at its worst.
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