Would it be possible for Sgh to launch a class action at asx...

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tongsui

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23/11/15

18:10

Post #: 16458455
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Originally posted by Mightyatom ↑

Added to this when a trader has amassed a high volume of shorts at a much higher price that trader can trade outside of shorting with no risk.

This creates an imbalance in the market. Example

If I have 1,000,000 shorts open with an average price of $5.

I am now in a postion to trade outside of shorting covered no matter which direction the SP heads. So I could have loaded up with genuine stock say 1,000,000 that was in the money leading up to AGM and then dump it on the market. I might lose a little selling it down but that doesn't matter because it is increasing the value of my shorts.

Then momentum takes over and completes the job for me and I can start buying up again at $2.15 - I don't have to close my short just create an upward momentum. Short declines in value but genuine stock bought appreciates. I then consider time to put pressure back on and sell down heavy again locking in profits on genuine stock while shorts appreciate in value yet again.

And on it goes until a circuity breaker in the form of a serious high volume buyer indicating it is time to close the shorts once and for all.

Net result no risk trading. All I am paying is a miserly loan fee for the stock borrowed back at Ave $5.

This is why shorting is wrong in my opinion. It goes beyond price discovery and goes into the realm of manipulation when shorts are so far in the money they provide risk protection for short-term trading.

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Would it be possible for Sgh to launch a class action at asx allowing shorting ?

SGH Price at posting: $2.15 Sentiment: Buy Disclosure: Held
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Would it be possible for Sgh to launch a class action at asx...

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