Why are Shorts so high and increasing, page-26

Hi All, an interesting post by @Fangk suggesting a possible reason for the continuing high short activity may be that they are trying to get GXY out of the ASX200 at the next rebal date. I provide a link to the post here as it's quite an interesting thought and wouldn't want to lose it in the general banter thread

https://hotcopper.com.au/threads/ba...4625/page-10086?post_id=40727328#.XZfYMtF_WhA

Anyway these rebals can be quite devasting to share price as the large ASX200 index funds mandates dictates that they no longer hold shares once it's no longer in the index. Funnily enough when you drop out of the ASX 200 you don't seem to then automatically get included in the ASX300, so you sort of end up in a no mans land of not being in either index from what I can determine (strange, given the significance it can have being in some of these indexes.). So perhaps it will provide a good profit for the shorters to get GXY out of the index and then cover as the index funds are forced to sell out.

Anyway for an example of of the impact that these sort of rebals can make SYR is an example of a company in the battery minerals space that recently was removed from the ASX 200. The rebalance announcement was issued on the 14/6 and was effective on open the 24/6.

On the 13/6 SYR closing price was $1.075 and on the 24/6 it opened at $0.83 and unfortunately continued to slide afterwards.

So this will be an interesting development to keep an eye on, I believe the next rebal will be effective after close third Friday in December with the announcement a few weeks beforehand.

Good luck to all the longs