Yeah well the things about Dots right . Is the fact that you don't need all that many to make a ' Straight Line ' or ' Parabolic Curve ' or any curve for that matter.
So using that analogy with respect to even the short's argument.
If you look closely the BIG volume position together with the start of significant increases in the shorts was taken or began on Friday the 16th of September.
O.K so since then around 40% of all closing trades ( approx 82 of them ) settled at between 22.5 and 23.5 cents with 50% being from 22 cents and 23.5 cents. The next biggest categories was the 21.5 and 21 cent levels with around 14.5%.
We also have the fact that these 83 trading days PLUS the remaining days from today through to the end of Canada's Tax reporting year to 31st of March and the FIRST official day of NAL production is virtually 50% of the entire year from 1st April 2022 through 31st March 2023.
So O.K then - from there we also know that FOREIGN Investors including trusts and business are EXEMPT from the Australian Capital Gains Tax 50% discounting , but are able to offset their losses and / or gains from investments against their own domiciled capital losses or gains positions.
From there we can apply the simple assertion that the SP has uncannily stayed mainly in this trading channel whereby the potential gains from selling short to YOURSELF would be anywhere from around 4.3% to 6.4% . We also know that shorts are sitting around the 10% mark of what MOST of the larger retail investors would be sitting on just outside of the Top 20. ( see my previous post which explained how I arrived at this conclusion ) .
We also know that the Broker lending rates for borrowing stock is around 5.75%.
So considering all of these points , it would be easy to negate the commonly suggested effect of the 50% capital gains averaging as irrelevant for these type Investors , and consider more the effect of the capital gain or loss offset on even their international tax perspectives
And its interesting that this effect has more or less equated to 50% of the 2022 /2023 tax year to March 31st 2023 or exactly 6 months , and that the trading range we are speaking of here which more denotes the ' Equilibrium ' or accepted trading range more than just an outright short position is ALSO more or less approximately 50% of the closing traded prices in that 6 month period.
So in my opinion , these larger holders just outside the Top 20 which included some very large retail holders are in effect hedging themselves with their 10% cumulative short position while they accumulate capital gain or loss income to offset their domestic tax position come end of the 6 month period .....which just so happens to coincide nicely with when the Company will be reporting the start of its productions and potentially earnings guidance from that production.
So in the meantime , they are accruing either 4.3 - 6.4 % LESS their 5.75% interest costs on their SHORT gains versus their 4.4 - 6.8% gains ( if they sell back to themselves on the way up ) .....or LOSSES if they are genuinely having to cover PLUS THEIR 5.75% interest costs.
So you can see by these ratios that there is not much in it except the original LARGE position taken back on the 16th September with most other sideways ' Equilibrium ' trading representing the the incremental income until BOTH the guidance is available come end of March and their own cumulative capital gains and losses can be offset against their own domestic capital gains or loss position.
Of course this is only a broad based theory which at the least explains why the Market is happy with the valuation matrix clearly being evidenced in this Share Price range.
In any case , this sideways share price ' tight range ' movement on HIGH volume over time has absolutely no regard for the benefits of HOLDING for the 50% cap gains discount. And there has to be a logical reasoning for this , because the prima facie cumulative gains or losses on just this trading more or less offsets itself entirely. Except for that which was obtained from the beginning and what they might have as gains or losses in the background of their own individual tax positions.
But in effect that the above lengthy example is another issue's where you can connect the dots in arriving at the ' Straight Line ' to the possible answer.
(20min delay)