Short Interest in iShares Interest Rate ...

LQDH Short Interest Plummets 99.1% — What ETF Investors Need to Know

Short interest in iShares Interest Rate Hedged Corporate Bond ETF (LQDH) plunged 99.1% to 5,561 shares; learn why and what investors should watch now.

iShares Interest Rate Hedged Corporate Bond ETF (LQDH) saw a dramatic decline in short interest in December, dropping 99.1% from 606,980 shares on November 30 to just 5,561 shares as of December 15. This sharp change is noteworthy for ETF investors tracking shifts in investor sentiment and market positioning.

Short interest is a key metric for understanding bearish bets against a security. For LQDH, the decline likely reflects substantial short covering, changes in borrow availability, or reporting adjustments. With an average trading volume of 45,122 shares, the days-to-cover metric fell from roughly 13.4 days (based on the November short interest) to about 0.12 days after the December reading — a striking compression that reduces the potential for a prolonged short squeeze in the near term.

What might cause such a steep drop in short interest? Market makers and institutional traders often adjust positions in response to flows, hedging needs, or funding costs. For an ETF like the iShares Interest Rate Hedged Corporate Bond ETF, which aims to offer corporate bond exposure while mitigating interest-rate risk, portfolio rebalancing and changing demand for rate-hedged income products can prompt rapid position changes. Administrative factors such as reporting lags or error corrections also occasionally produce large revisions in published short interest data.

What investors should watch: first, monitor subsequent short interest reports and trading volume to confirm whether this is a lasting trend or a temporary adjustment. Second, follow ETF flows, prospectus updates, and iShares commentary to understand portfolio changes that could affect supply and demand. Third, consider the broader fixed-income environment; shifts in interest rates and credit conditions can influence demand for interest-rate hedged corporate bond strategies.

Bottom line: the LQDH short interest plunge is an important signal but not an isolated trading recommendation. ETF investors should treat the 99.1% drop as a prompt to investigate further — check official filings, watch upcoming short interest releases, and, if needed, consult a financial advisor to align positions with your risk tolerance and investment goals.

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