Brainchip Short Discussion, page-103

First 103 Last

Share
Profile

Follow
Stickshift

7,989 Posts.

2103

15/09/23

19:44

Post #: 69880151
Share

Originally posted by mapp: ↑

Ok I think I am beginning to understand the shorting process.

Shorters borrowed shares from brokers for a fee. I understand the fee is around 18%pa. The shorters then sell the shares on market. At this stage both the original owner, who may be unaware of the transaction, and the shorter have a beneficial interest in the shares

In April 2022 the RBAstarted increasing interest rates.

Using BRN as anexample.

Lots of people, cashed up because of COVID and sick of 0% interest looked around and decided the share market was a good place to invest. Some where careful and decided to invest in index funds, others were more adventurous and followed momentum investing.

BRN was going up so it looked like a good bet. BRN greatlyincreased in price as a result of some good stories.

In January 2020BRN (Shorts 0.02%) was $0.05. In January 2021 BRN (Shorts 0.07%) was$0.50 as a result of some significant technical achievements. InJanuary 2022 BRN (Shorts 2.50%) spiked to $2.00 as a result ofglowing reports by Mercedes engineers.

In April 2022 the RBAstarted increasing interest rates.

Profit taking saw BRN (Shorts2.63%) fall to $1.00.

In 20 June 2022 BRN(Shorts 4.44%) was added to the S&P ASX 200 index. Index fundbuying push the price to $1.10 as the funds bought 100,000,000* BRNshares. (*guess anyone know the true figure).

Shorters engaged intactical selling that lowered BRN’s price. Many BRN holders whereaffected by the increase in interest rate and seeing a falling pricesold out. Investors interested in buying BRN decided not to catch afalling knife.

The tactical selling in effect was in shorters takingnew position selling to other shorters getting cover. The fall in BRNshare price neatly matching the increase in percentage shorted.

InAugust 2023 BRN (Shorts 8.20%) price fell to $0.27. The total numberof shorted shares was about 130,000,000.

20 Sept 2023 BRN(Shorts 7.3%) $0.30 was removed from the S&P ASC 200 index . Theindex funds needed to rebalance .

This is where themagic happens. I don’t understand. The index funds sell the shares,the shorters buy the shares to return to the lender. This cross trade happens off market. (Can someone explain how this works?)

The result being theindex funds have lost about $70,000,000 and the Shorters made$70,000,000 less costs.

The index fund managers don’t have to worryabout the loss because they are just following the index. Theinvestors in the index fund are none the wiser.

The whole processhas benefited me because I managed to top up @$0.28 and will hold andenjoy BRN’s progress.

Expand

That's not correct at all.

There are numerous educational resources out there that explain the shorting process very clearly (I recall they've been shared with you before).

There is way more disinformation about shorts on HC than facts - it's startling.

It will be interesting to see the effect on BRN's liquidity now that many shorts are out.

BRN Price at posting: 29.5¢ Sentiment: None Disclosure: Not Held
4 Upvote

1 Great analysis

Reply

Top Stories

Bitcoin jumps 8% to beat record on Trump vote optimism

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

LRD

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

SI6

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

There are more pages in this discussion • 550 more messages in this thread...

First 103 Last

Add BRN (ASX) to my watchlist

(20min delay)
Last 27.0¢		Change 0.035(14.9%)		Mkt cap ! $532.5M

Open	High	Low	Value	Volume
24.5¢	27.8¢	24.5¢	$7.349M	27.69M

Buyers (Bids)

No.	Vol.	Price($)
13	156211	27.0¢

Sellers (Offers)

Price($)	Vol.	No.
27.5¢	624856	21

View Market Depth

No.	Vol.	Price($)
12	137700	0.270
12	2152701	0.265
12	494745	0.260
13	583150	0.255
27	441271	0.250

Price($)	Vol.	No.
0.275	624856	21
0.280	1778168	35
0.285	631540	23
0.290	666074	17
0.295	303903	14

Last trade - 16.10pm 06/11/2024 (20 minute delay)

BRN (ASX) Chart

Brainchip Short Discussion, page-103

Bitcoin jumps 8% to beat record on Trump vote optimism

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Brainchip Short Discussion, page-103

Top Stories

Bitcoin jumps 8% to beat record on Trump vote optimism

Palladium's the newest geopolitical hot commodity. But ASX exposure is limited

Lord picks up high-grade copper play in Western Australia, with past intercepts of up to 6.62%

Nanocap Si6 Metals to kick off drilling at Monument gold project WA, chasing past hits

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News