The great Orocobre short-squeeze, page-41

I have just started digging into shorting and am trying to work out how many individuals/entities are actually involved and how they trade and how long it may take to unwind the high level of shorting. It helps me to make sense of this by writing it down and allowing people to discuss so I make no claims this is useful or even sensible. The data I am using comes from shortman.com.au and CommSec.

My numbers are rough and may be out based on the split between ASX, TSX etc but on 210m issued shares there are approximately 48 million shares being shorted (23%). The shorting started in earnest in September 16 at which time about 1.5m shares traded each day. Over the past 3 months about 2.5m shares have been traded each day except that during the drop from $3.75 to $2.62 the volume increased to about 5m shares per day (27/2 to 13/3) with peaks around 7m per day and the volume of shorted stock increased from 10% to 15% (21/2 to 7/3) = 10.5m shares. Since this period the share price has wobbled around and is now climbing nicely despite another 8% or 17m shares being added to the shorts.

The key to me is that the shorts did not manage to get out during this 7 week period but appear to have been in a continuous battle to keep the SP around $2.75 and by adding in an additional 8% of shorted stock digging their own graves?! I also expect that there are almost no additional shares out there that can be added to pool of shorts - they have run out of ammunition.

Assuming 40% of the daily trading is shorts, based on the volume numbers this is about 1m share per day, so 47m shorted shares are NOT being traded each day. So not much going on in trying to arbitrage intra-day price variation.

This must seem similar to Hitler's retreat from Moscow for the shorters.