Yesterday volume 15 mln, AH 5 mln: what happened?

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Fishermangents
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Yesterday volume 15 mln, AH 5 mln: what happened?

Post by Fishermangents » Sat Dec 19, 2015 11:24 am

Yesterday (Dec 18) the volume was almost 10x higher than average. AH only was 5 mln, yet without significant price movement. What happened? Who were sellers and who were buyers? How can shorts cover (if they did) without moving PPS up more significantly than it did based on such volumes? Any thoughts?

Fishermangents
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Posts: 531
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Re: Yesterday volume 15 mln, AH 5 mln: what happened?

Post by Fishermangents » Sat Dec 19, 2015 11:42 am

From jwjmurphy (YMB, 19 Dec 2915)

"Smart hedges covering. Hedged all along now they own the stock!!! No choice really. see one MM on both sides the trade with 10,000 bids/asks one penny apart! But today, often 2 whole big pennies apart, rare. Then covered at close and later cause the game is up. They trade for one thousandths of a cent with advantage of a fraction of a microsecond against each other and it has been a very bad year for the hedge funds screwing each other."

Any additional thoughts?

I_Believe_Irish
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Joined: Thu Dec 10, 2015 2:38 am

Re: Yesterday volume 15 mln, AH 5 mln: what happened?

Post by I_Believe_Irish » Sun Dec 20, 2015 7:42 pm

Institutional shorts can cover by negotiated agreement, which includes price and time of sale, with other institutions that own shares. The exchange requires those transactions to be reported through the exchange within a short time frame (like 30 seconds after completion).
The transactions were designed to be completed at the end of the day so the price would not be changed significantly, however, if many millions of shorts covered, the large short interest will be diminished and we should see less resistance to upward price movement as well as fewer short sales each day which the shorts determined were necessary for the past months to keep the price down.
There were not enough shares covered to eliminate the large excess of shorts and there is no guarantee that the shares that covered were legally shorted, so the number reported by NASDAQ for the end of December will be interesting. The remaining shorts could be anywhere from 20 to 30 million shares. The trend is to reduce shorted shares, and that is good for equity holders. I would not be surprised to see some more large blocks traded at the close or in after hours as the year end approaches.
If the short percentage decreases to 2% or 4% (from 25%), there will be no obstacle to making large moves upward, closing that value gap that you talked about in another thread.

I_Believe_Irish
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Re: Yesterday volume 15 mln, AH 5 mln: what happened?

Post by I_Believe_Irish » Sun Dec 20, 2015 7:53 pm

Part 2 - I hit submit without mentioning that there were over 5,500 $5 call options expiring on Friday (550,000 shares) that the holders would have been willing to sell had the share price approached within a few pennies that number, providing a buffer allowing the shorts to agree to a price near the close with pretty good assurance that the price at close would be under $5.00.

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