lots of talk about shorters shorting PLS... there is less than 0.11% of PLS currently in a short position. 9 times that volume traded today so to cover it wouldn't be hard. To Short a company an investor needs to borrow the stock from an institution. Citi, UBS, JPM all the investment bank types will help out but ultimately if you can't borrow the stock it's pretty hard to short a company. The other alternative is by using your own stock and writing options or warrants.
except there are no options currently available on PLS which means that no one has gone to Citi or UBS etc and handed over custodial ownership of their shares in order to write/create an option. Once upon a time "shorting" meant that you used your underlying shares to create a call option (allowing someone the right to buy your shares at the current market price or higher) and then using those funds to buy puts (the right to sell). Basically you offered your shares at a price that you didn't believe that would be achieved so you didn't actually have to sell your shares and used the income to open up a Put position that would increase in value as the underlying shares dropped in price. But there are no options on PLS...
that leaves warrants.. 50,000 puts went through today for a total of $82k which is pretty minimal given PLS is a multi-billion dollar market cap.. HEAPS more calls were purchased... interesting.. not a lot of shorting going on... buying warrants is as easy as buying the underlying shares so there's no secret in how to use warrants to short a company except to isn't really shorting, its buying a put. Personally, when I buy put options or warrants I would say that I bought a put, not that I had shorted the company as it's a different thing. Citi lists all their warrants on their website including all the volumes so it's pretty easy to see where the volume has been.
lastly here is Mac Bank's view on the Quant side of pricing. In their opinion the key driver of price is volatility, as anyone who mucks around with derivatives (options/warrants etc) will know volatility is one of the key drivers in pricing. If a bank could short their brains out on something as volatile as PLS they would. Those short positions change a lot so it pays to check them regularly. Volatility is not linear, PLS has been +/- $1 in a week or so.. for a $3/share that's a lot of movement which equals higher volatility which would mean if there were options the pricing would blow out quickly, which a trading bank would love as they could make more money...
final point is that people freak out when they see single shares or single digit trades of shares etc, that's nothing at all to be concerned with, it's just how algorithmic trading (algo bot) works. The big trading houses like Citi, UBS, Barrenjoey, Mac Bank etc all use the same "bots". If I place an order through Mac Bank then it will be traded through an algo bot, doesn't mean I'm a faceless evil schemer who is trying to defraud people. If you use a wrap account for your SMSF then your PLS trade would have been facilitated by a bot... The other thing to consider with regards to algo bots is that they seek out stop-loss positions. Again, from someone who does a bit of derivatives trading, stop-losses are for futures positions where the downside is unlimited. If you had tried to short physical Lithium and it all went wrong you would need to actually settle the contract and provide actual tonnage of lithium or default on your position and pay up. Stop-loss hunting is a real thing in smaller companies but much harder to do in something the size of PLS. I don't know why people use stop-loss positions on their physical share holdings unless it's in conjunction with a margin loan for LVR protection?
So, just my 2 cents worth, PLS is a very big company that the major broking houses have targets on. It doesn't have options so things are still going to change in the future. It probably has been heavily shorted in the past but isn't at the moment. Bots, shorts, derivatives and volatility are all just part of the market. If you have a super account with any of the super funds then you probably have some PLS exposure and it has been acquired by bots, shorts and volatility. It isn't difficult to manipulate small stocks, just look how hard ASIC is cracking down on fin-influencers (they are the real bad guys in the modern stock market..) it IS difficult to manipulate a very large company's share price like PLS. If it's dropping it's because the price that people think it's worth buying is less than what people think its worth selling...
next time there's lots of talk about shorting, just check the ASX website and search for short positions. They list all the shorts across all companies so it solves that riddle pretty quickly.
Just as an aside... I have no idea who these BEOT types are that get mentioned on here all the time? Bloody Evil Orchestrating Troll? what does it stand for? Boiled Egg On Toast??
bit of a rant but my kids have Gastro and I'm hiding from my family in my shed so I don't get sick, not trying to pick any fights just clarifying the comments on here around shorting which always seems to get people a bit upset. my kids are running out of shorts but that's from gastro not Macquarie Bank and all those other Boiled Eggs On Toast...
PLS Price at posting:
$2.90 Sentiment: Buy Disclosure: Held
(20min delay)