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78.0¢ avz minerals limited

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Tradingirl

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174

11/11/21

11:43

Post #: 57490052
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Originally posted by Obe wan: ↑

“Right. So it's "oversold" because ppl were dumping shares cause of margin calls, overselling in other words.” - correct

“ So to have that margin calls means they didn't think there'd be much increase in SP in other words?! “

Errr no, that's not quite correct. In short Invasts margin on AVZ was only 10%, .....10% is very low; but in broad simple terms, if you had $50k last week, you could have bought a million AVZ shares at 50c using marginal lending with Invast

For every pip the SP goes up on a million shares, it's $10k in the green ; the opposite of course is true ; so if you bought 1m shares for 50c last week...and the SP dropped over 6 pips, basically your initial $50k would have been wiped out and a debt collector would be at your door for what ever you now owed invast.

Invast account holders whom held AVZ got notice late last week of the change ; apparently there was an absolute bucket load of AVZ holders all leverage up; Invast change went from 10 to 35% over only a few days with a weekend in between; so as people rushed to dump and try step out of the way, of a burning outgoing tide; portfolios were beginning to evaporate as those pips went south, hence the increased rush for the door.

So anyone running their margin hard I.e. building position as the marginal profits dropped back into their account and buying more stock out of the proceeds and having less than 35% built needed to sell pretty quickly .

in short, Invast probably saw too many people holding too many shares on leverage and building positions, which was a significant financial, administrative, external services risk if the turned and accounts started to blow up .

Invast pulled the risk adversion lever...again 10% was pretty low, considering others are at 50-60%; remember, we also had issues with CFD margin adjustment a few months ago which also created some pressure sales

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Thanks for explaining. I think I'll stick to owning share outright ;p

AVZ Price at posting: 53.5¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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