@bug1 - I definitely want to understand this setup better myself.
The announcement was worded "
...currently holds indirectly, (through Janchor Partners), a 17.9% interest in Vocus (constituted by a relevant interest of 9.24% of Vocus’ voting shares and an economic interest through cash settled equity derivatives in a further 8.66%)."
It did not state what kind of equity derivative - options, swap or future.
Let's assume it's an option.
If he has a long equity derivative that simply means he is the buyer of the derivative.
The derivative itself can maybe be a call option or a put option.
Therefore a long put option ... give him the right to SELL the shares at a certain price ( strike price ) within the contract period. Being a long holder of a derivative doesn't mean you are actually "going long" on the underlying equity....with a long put option you are betting the price will go down.
"economic interest" does not equal ownership, maybe it implies potential ownership?? can we therefore assume the derivative is one where he will end up owning the shares if exercised? Or does this imply he has an obligation, not an option, to exercise??
For example the 8.66% "economic interest" through cash settled derivatives could mean he has a long call option.... at what strike price?
And yes, for him to be long on the options contract someone is short... but this is not on the open market and only in the context of the derivatives contract.
Also....
"A cash-settled equity derivative is settled by the exchange of cash rather than the exchange of the underlying shares. It is common in the case of a cash-settled equity derivative for the writer of the derivative to hedge its position by acquiring the underlying shares, but there is usually no obligation to do so."
I wonder then, who is the "writer of the derivative"...... aka the "short" on the derivative.
Again, in this context the "short" is not a short on the open market but in the context of the derivative.
Curiously, the above excerpt states that the writes does not even have to OWN the shares to write the derivative??
So theoretically, without any buying or selling of any shares, someone wrote up a derivative contract and sold this for a premium to Janchor, giving Janchor the option to purchase 8.66% of the share in issue..... But nothing has even happened on the open market where we trade.
Given the above, there is the possibility that someone BOUGHT/OWNS the 8.66% of VOC for the purpose of the derivatives OR they will still have to buy it IF Janchor decides to exercise the call option... assuming it's a call option and not a future.
So I don't see the shortman reported shorts as being directly related to the equity derivatives mentioned.
Would love for someone to correct me or shed some more light on this.....
