Hi
@DaisyA
We can see from the two-days 5-min chart below that Tim Goyder's share purchase was announced at 3.10pm on Friday 20.
And it' correct that most of the shorting last Friday was done prior to the announcement by Tim Goyder. It's obvious.
Shorters was expecting LTR had to go for a capital raising, but TG said "no way"
The sp went up straight away and purchase (green) volume increased. TG's purchase on market was a very important assurance for the holders and has been a nightmare moment for the shorters indeed. Because TG's purchase was giving the signal that there wouldn't be a capital raising.
That it has been a big hit on faces of the shorters. I think it has open the gate for the short squeeze.
The shorters were expecting around 20%-25% drop on Friday, but it didn't happen.
Most of us know that in these type of unexpected negative situations the stocks generally lost quite a lot.
They were not alone, the some traders and brokers also wanted to join the shorting party. They wanted to take the opportunity and started shorting. As you can see on the chart the sp was going down by gradual until 3.10pm on Friday.
Then it turned up after TG's purchase.
So simple.
Now the small shorters will close their short positions and the master shorters will be in more trouble.
Now the adverse effect of big shorting is starting IMO. The small shorters will be buying back if already not IMO. Maybe some of them have already got margin calls and have been asked to increase their margin deposits. The small shorters will get margin call if they don't have enough funds to top up their deposits, or they will chose to buy back in loss as the sp is obviously going up (No CR). Then that will put the big shorters in big trouble.
(When you are going to short a stock you have to put a deposit which is a percentage of the sp of that stock. Say the bank or broker is asking for 60% deposit for LTR. If the stock price goes up you have to to up that margin back to that percentage of the new sp. If you can't top it up then the bank or broker will buy all thos amount of shares at market price immediately, and that will even cause higher sp)
IMO, the short squeeze has already started.
We will see.
(20min delay)