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Foibles

137 Posts.

51

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
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(20min delay)
Last 20.3¢		Change 0.003(1.25%)		Mkt cap ! $579.3M

Open	High	Low	Value	Volume
20.5¢	20.5¢	19.5¢	$708.6K	3.537M

Buyers (Bids)

No.	Vol.	Price($)
41	815121	20.0¢

Sellers (Offers)

Price($)	Vol.	No.
20.5¢	3324970	48

View Market Depth

No.	Vol.	Price($)
39	809001	0.200
73	3447065	0.195
54	2951398	0.190
35	1441737	0.185
37	1201844	0.180

Price($)	Vol.	No.
0.205	3338452	49
0.210	1443315	16
0.215	403840	10
0.220	893481	27
0.225	1173767	15

Last trade - 14.08pm 19/06/2024 (20 minute delay)

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