Market manipulation on ASX, page-61

Sigh. I really don't understand the aggressive behaviour. I am NOT arguing for the sake of it. I'm trying to have a civil and respectful discussion. Surely that's not too much to ask? Perhaps I haven't done much of a job articulating myself, although I think I've given it a decent crack.

We've already agreed that the presence of shorters adds to liquidity -- both on the sell side, as demonstrated in the worked example, and also on the buy-side when they close-out (also mentioned in my post).

In the closing comments to my previous post I was pushing back against your previous assertion of buyer/lenders acting in concert with related shorters to manipulate the market downwards in a plenty liquid market. As mentioned earlier their related trades would need to occur on-market in order to have the desired manipulative effect. However, those parties would somehow need to systematically bypass the market operator's order flow rules (i.e. ignore all the other competing buy/sell orders) on an industrial scale. That's just too implausible for me.

In reality, the shorters are vastly more likely to sell to unrelated buyers (bidding competitively) who are, more likely than not, v.unlikely to turn around and re-lend the same stock over and over again to the same shorter for endless subsequent rounds. And the chances of the short-sell/buy transaction occurring in a non-competitive manner (i.e. lower than the prevailing competitive bid in order to manipulatively drive the price lower) is somewhere approaching zero, imo. Perhaps I didn't spell that logic out clearly enough in my earlier post.

With respect, your explanation appears to turn on a core premise that the presence of shorting automatically leads to price drops, which unduly influences other market participants, leading to market distortions. I won't go so far to suggest that this cannot ever happen -- even in a market with v.good liquidity like PLS. (Nothing is absolute; anything is possible.) However, to present a fixed singular cause-effect relationship of how the presence of shorts in the market affects price discovery, and by extension, the behaviour of other participants, appears simplistic in the extreme. It completely ignores the incredible complexity of behaviour that all the other market participants bring to bear in a very liquid market.

In an earlier post I mentioned the idea that deterioration in the fundamentals is the oxygen that shorters require to ultimately succeed. When the fundamentals deteriorate long holders of all shapes and sizes aren't going to ignore it. Some (many?) will reass and there will invaribly be long sales, independently of what shorters may or may not do. It's a complex world with all manner of different decisions being brought to bear on the market on any given day. Shorters are only one part of the equation which I think you are ascribing oversized importance to. That said, when there's an existing cumulative 20+% short position in a stock I think we'd both agree that when the time eventually comes to unwind it should be good for the longs.

If you find this post argumentative for the sake of it, know that I have stayed on-point to address what I see as some faily large holes in your previous assertions. I have treated you with respect and I expect you to do the same.

Have a good weekend.

Cheers.

PS. Hopefully next week brings a more decent short squeeze. Will it mark the end of the downturn? Dunno. I'm not entirely convinced the cycle has finished yet. But that doesn't mean the shorts won't have to endure an interim squeeze in the meantime.