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Foibles

214 Posts.

77

08/02/24

19:42

Post #: 72311620
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Originally posted by gimo211: ↑

Hi kmuirhead,

"Why on earth would an index fund commission a third party to do the short selling so the third party could borrow shares and sell these shares to the index fund?"
I think the following logic underlies this:
An index fund must reflect the inclusion of STX in an index (e.g. ASX 200) in proportionately in a certain time.
Therefore, the fundmust acquire a correspondingly large quantity of STX shares. The index fundtherefore creates - from its point of view - an “artificial” and large demand.
If the index fund were to buy the required Strike shares on the market, this would lead to a significant increase in the share price.
However,an index fund wants to avoid this, as a fall in the share price after coveringits own requirements would have a direct negative impact on the fund value.
Shortselling therefore provides the necessary liquidity: the index fund can coverthe necessary demand immediately - without moving the share price.

That is theanswer to your question...

I expect that we will see an enormously high volume tomorrow in the closing auction andon Friday an ASIC report on an equally high short selling volume.

Let's see...

Expand

spot on. (Re auction close volumes)
Last edited by Foibles: 08/02/24

STX Price at posting: 42.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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(20min delay)
Last 21.0¢		Change 0.000(0.00%)		Mkt cap ! $601.7M

Open	High	Low	Value	Volume
21.0¢	21.5¢	20.5¢	$1.313M	6.260M

Buyers (Bids)

No.	Vol.	Price($)
11	592504	21.0¢

Sellers (Offers)

Price($)	Vol.	No.
21.5¢	748432	9

View Market Depth

No.	Vol.	Price($)
10	582322	0.210
22	1512044	0.205
28	880972	0.200
15	964889	0.195
29	1196918	0.190

Price($)	Vol.	No.
0.215	683524	7
0.220	796374	9
0.225	948630	8
0.230	684332	9
0.235	1730960	19

Last trade - 16.10pm 18/10/2024 (20 minute delay)

STX (ASX) Chart