First Trust NASDAQ BuyWrite Income ETF ...

First Trust NASDAQ BuyWrite Income ETF (FTQI) Short Interest Up 23.2% in February

FTQI short interest jumped 23.2% in February to 76,825 shares. Rising short exposure with a 0.25 days-to-cover rate suggests limited squeeze risk for investors.

Short interest in the First Trust NASDAQ BuyWrite Income ETF (FTQI) rose notably in February, climbing 23.2% to 76,825 shares as of February 27. That represents an increase from 62,349 shares reported on February 12. With an average daily trading volume of 304,116 shares, the ETF’s days-to-cover — about 0.25 trading days — remains extremely low, tempering concerns about a potential short squeeze.

Why the rise in FTQI short interest matters
A rising short interest in FTQI can signal growing bearish sentiment or increased hedging activity among traders and institutional investors. Because FTQI follows a buy-write approach aimed at generating income from NASDAQ exposure, changes in market expectations for tech and growth stocks, volatility, or income strategies can influence short positions. The 23.2% jump is notable, but it must be interpreted alongside liquidity metrics like the average trading volume and days-to-cover.

Low days-to-cover reduces squeeze risk
Despite the increase in shares sold short, the low days-to-cover ratio — roughly one quarter of a trading day — indicates that short sellers could cover positions quickly without dramatically disrupting the market. In practical terms, the short interest level is unlikely to create the kind of supply-demand imbalance that fuels major squeezes, especially given FTQI’s relatively high trading volume.

What investors should watch next
Investors tracking FTQI should monitor short interest trends over multiple reporting periods, along with ETF flows, option activity, and broader Nasdaq performance. A continued rise in short interest combined with falling volume or sudden news for NASDAQ-focused strategies could change the risk profile. Conversely, stable or declining short interest would suggest the February uptick was transient.

Bottom line
The 23.2% increase in FTQI short interest in February is a clear signal that some market participants are betting against or hedging this ETF, but the short-term risk of a squeeze appears limited thanks to high liquidity. Investors should keep an eye on subsequent short interest reports, trading volume, and any catalyst affecting the Nasdaq or buy-write income strategies before making portfolio decisions.

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