Share
411 Posts.
lightbulb Created with Sketch. 157
clock Created with Sketch. 06/10/21
19:08
Share
Originally posted by theloft:
↑
As the short seller, you get a recall notice and have to be done by COB that day. If the lender needed to sell, they will be selling at the same time. Since settlement is T+2 everything is sorted then. They are seperate transactions, but in theory I could be buying back stock from my lender through ASX. BTW, if you don't complete by near COB, the lenders agent will just buy you in at any old price. For example, if I use Invast, and Credit Suisse call in the short, Invast can see my account in real time and if I'm not done by 3:59, Invast will do it in the CSPA at whatever price. Otherwise, I'm up for settlement fail charges etc. If ADN fell out the index, I think it's inevitable that the shares will fall when its announced, because everybody tries to frontrun the tracker funds, as they try to deal as close to last price as possible, which is why things get done in a rush (see the day ADN went in!). There will be a recall of the shorts from those tracker funds on the Thursday/Friday. But new shorts will load up before because there is a full trading week's notice of the index change (ADN going in announced after close on Friday 12 March w/e/f the open on Monday 22nd March). One thing you can guarantee is there will be heaps of liquidity. So the likely biggest weakness will be the Monday beforehand & then a bit on the Friday before the next Monday effective date. Once it is out of the index, things settle down to fundamentals again.
Expand
My main theory is that those shorting are hoping to keep a lid on the SP until March, where if we fall out of the all ords there will be large volume available and usually a drop in SP like you mentioned.
