Lending your shares. Shorting our company- Post park run fun today 
Lending our shares - Copied from CMC markets Stock Lending page CMCInvest | Stock Lending | CMC Invest
How much could I earn?
The Securities Lending Yield Rate is primarily driven by supply and demand dynamics. While most stocks will generally have an annualised yield of under 0.5%, certain stocks can be classified as "Specials" due to unusually high borrowing demand. These "Specials" can command significantly higher yields, often influenced by short-selling or limited stock availability. However, this elevated demand is typically short-term, lasting from a few days to several months, rather than an entire year.
The table below provides an example of potential ownings you would receive if you own 3,000 shares of XYZ Limited, trading at USD $150 per share, (total value of USD $450,000) and BNP Paribas SA offers CMC Invest a 10% annualised yield to lend your shares, after deducting their fee:
| Potential Earnings |
Duration | 7 days | 30 days | 90 days |
Yield | 0.19%* | 0.83%* | 2.50%* |
Potential Gross Earnings | USD $875.00 | USD $3,750.00 | USD $11,250.00 |
Earnings Share 50% split with CMC | USD $437.50 | USD $1,875.00 | USD $5,625.00 |
Conversion to AUD at an exchange rate of 1.5 | AUD $656.25 | AUD $2,812.50 | AUD $8,437.50 |
The reason for borrowing shares is for Hedge funds and Players to Short Trade the shares
Looking at Boss and Lotus short trading over the last 3 months. Question is could this bankrupt the Hedge Fund and Players and just possibly the people Lending their share for playing?
Short trades have bankrupted traders in numerous cases,primarily due to the unique risks associated with short selling. When shorting a stock, a trader borrows shares and sells them, hoping to buy them back at a lower price. However, if the stock price rises instead of falls, the potential losses are theoretically unlimited, since there is no cap on how high a stock price can go. This is in contrast to buying (going long), where the maximum loss is the amount invested.
Several high-profile examples illustrate how short tradescan lead to bankruptcy:
- Short squeezes: Events like the GameStop surge in early 2021 caused massive losses for hedge funds and traders who were heavily short the stock. As the price soared, short sellers were forced to buy back shares at much higher prices, resulting in billions in losses and, in some cases, the collapse of funds.
- Tesla shorts: In 2020, traders who bet against Tesla collectively lost over $40 billion as the stock price rose sharply, leading to significant financial distress for some funds.
- Unlimited risk: Unlike long positions, short trades can result in losses greater than the trader’s account balance, potentially leading to margin calls and forced liquidation of assets, which can wipe out accounts and bankrupt traders.
Key risks that contribute to bankruptcy from short tradesinclude:
- Unlimited loss potential: If a stock rises, losses can exceed initial investment, and margin requirements can force traders to cover positions at a loss.
- Short squeezes: Coordinated buying or unexpected positive news can drive prices up rapidly, forcing shorts to cover at huge losses.
- Margin calls: If the price moves against the short, brokers may require additional funds; failure to meet these can result in liquidation and loss of all invested capital.
In summary, while short selling can be profitable, it isinherently risky and has bankrupted both individual traders and large hedgefunds when trades move sharply against them
In 2023, short sellers in the U.S. marketended the year with a cumulative $195 billion in paper losses,offsetting prior years' gains.
Lotus via Shortman ShortMan - Shortposition graph for LOT
BOSS via Shortman ShortMan - Shortposition graph for BOE
The largest amount lost by short sellers in asingle event is widely attributed to the Tesla short squeeze in 2020, whereshort sellers lost approximately $40billion over the course of the year as Tesla's stock price surgeddramatically. This loss was not due to a single trading day butaccumulated over several months, making it the most significant aggregate lossfrom short selling on record.
Its clear short plays on LOT and BOE are still playing. What those who lend there shares may not know is “If you lend your shares, you donot lose ownership of them in the typical sense, but there are important risks to consider:
- Counterparty Risk: The main risk is that the borrower may default and not return your shares. In such cases, you are entitled to collateral (usually cash or government securities) that the borrower provided, typically set at a value higher than your shares (often 102% or more). If the collateral is insufficient or loses value, you could face a loss.
- Collateral Risk: If the value of the collateral drops or is not properly managed, you might not be fully compensated if the borrower defaults.
- Operational and Delivery Risk: Errors or delays in the process could impact your ability to get your shares back promptly.
- Loss of Voting Rights: While your shares are lent out, you temporarily lose voting rights associated with those shares.
- Market Risk: If the shares you lent increase sharply in value and the borrower defaults, you may only receive the value of the collateral at the time, not the potentially higher market value of your shares.
Brokerages and lending programs typically mitigate these risks with daily collateral adjustments and legal protections, making outright loss rare, but it is possible in extreme scenarios (such as both the borrower and intermediary going bankrupt at the same time)
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Looking at just one Billion$ player Hedge fund Melvin Capital from about 30 million profit per year to dead is interesting in this. In 2021 “During the height of the squeeze, Melvin was reportedly losing more than a billion dollars a day.”
That’s one Hell of a Burn!
JP Morgan may be one of the players in BOE and LOT? It may be directly shorting or for its clients or both.
In some jurisdictions,such as the UK and Japan, regulations require public disclosure of individualshort positions exceeding certain thresholds (e.g., 0.25% or 0.5% of issuedstock), including the identity of the short seller. In Australia, whileASIC can identify short sellers for regulatory and enforcement purposes, thisinformation is not routinely made public unless there is a specific regulatoryaction or enforcement proceeding
It would be nice to see who is shorting our company rather than assumptions!
Boss
Boss Energy U₃O₈ Production Forecast
Boss Energy’s Honeymoon Uranium Project is ramping up in line with its Feasibility Study schedule. Annual U₃O₈ outputs are projected as follows:
- FY2025 (to 30 June 2025): At least 850,000 lbs of U₃O₈
- FY2026 (to 30 June 2026): Approximately 1.63 million lbs of U₃O₈
- FY2027 (to 30 June 2027): Targeting 2.45 million lbs of U₃O₈
Lotus
2025 | ~650,000 | Production from Q3–Q4; approx. half of 1.3 M lb run-rate |
2026 | 1,300,000 | 600,000 lb (NA utility) + 700,000 lb (Curzon) contracts2 |
2027 | 1,300,000 | Stable run-rate under existing binding contracts |
Will shorts be caught short? What is very clear GAMESTOP was not really comparable to the clear cash income generation BOE, LOT and PDN will have. Why the short players are still playing is not at all clear to me. One thing is. I will not lend my shares to them
Have a great weekend all
(20min delay)