18th Aug Flash Short – Update Week 5

Alfacomp

26 September 2017

Monday 18th Sept 2017

Trading was relatively slow before 1pm, with a nett trade deficit (more Sells than Buys) of some 200K being established. This was overturned with a single, and uniquely expensive (at 9.85p) Buy of 258Kat 1:31pm shares which seemed higher than the reported Ask at the time. Some large round number Sells (100K, 150K, 250K) just before 4pm were partially offset by repeated buying at the 9.675p level, with the day ending with a nett trade deficit of 428K. There are no obvious Bed &ISA combinations and no changes in Bid/Ask that would seem to justify an expectation of more delayed reported trades.

The SP ended at 9.5p, up 1.2% on a volume of 1.5M (559K Buys vs 986K Sells).

Tuesday 19th Sept 2017

Again a quiet start, but a series of round number Sells (70K,80K,25K,30K) just after 10AM led to the establishment of a nett trade deficit of around -400K. This was absorbed by the Bid/Ask until a large Sell of 300K at 2:25PM.  The drop in Ask generated some Buying excitement, though quite a bit of this can be ascribed to a single LSE individual closing out on T20 trades. A further 300K sell after hours led to a days trading deficit of -1.17M – the largest deficit seen since the 18th August. Evidently the assumption that Market Makers desire to avoid creating an inter-day long or short position would appear to be just that and one which, unless further trades are reported, does not appear to be maintained here.

The SP ended at 9.38p, down 1.2% on the day on a volume of 2.3M (583K Buys vs 1.75M Sells)

Wednesday 20th Sept 2017

The large sell after hours on the previous day appeared to have an effect on the Bid early on, ahead of a 250K Buy at 8:34AM. Having generated a nett surplus of trades (more Buys than Sells) of some 400K by 9AM the real price paid for Sells continued to rise before noon. There was relatively little trading in the afternoon and the Bid/Ask  did not change, leaving a nett trade surplus at the end of the day of some 264K more Buys than Sells.

The SP ended at 9.25p, down 1.2% on the day on a volume of 877K (571K Buys vs 306K Sells).

Thursday 21st Sept 2017

Another relatively quiet day, albeit with two 100K sells soon after the opening of trading. There was no change in the Bid/Ask all day and little change in the nett trade position until a 500K Buy at 2:07PM. Further sells after this, including one after hours, led to an almost completely neutral trade position at the end of the day.

The SP ended at 9.25p, flat on the day on a volume of 1.2M (591K Buys vs 610K Sells).

Friday 22nd Sept 2017

Very similar to thursday with price flat but even fewer trades.

The SP ended at 9.25p, flat on the day on a volume of 910K (451K Buys vs 459K Sells).

Summary for Week 5

SP Change TBP estimated Buys – Sells Potential Shorting Activity Comments
Monday 18-9-17 + 1.2% – 427,552
Tuesday 19-9-17 – 1.2% -1,170,184 2x more 300K Sells 1x300K sell a LTH T20
Wednesday 20-9-17 – 1.2% + 264,884
Thursday 21-9-17 Flat  – 18,963
Friday 22-9-17 Flat – 8,296
Total – 1.2% -1.36M

Conclusion

The most obvious feature of week 5 is that there are no really obvious shorting features despite the continuous attention that we were getting from the usual faces during the week. The imbalance in nett trades on Tuesday is rather striking though – achieved primarily by a total of 3x 300K Sells. We have been informed that one of these was a LTH closing a T20 trade as a sell but they also then bought more than 300K shares so that makes no nett contribution – that leaves 2x 300K share Sells which form the majority of the trading imbalance.

These could be be possible further shorting Sells – if they were then they had a negligible effect on the Share Price. Or they could be one market maker selling to another to offset behaviour in previous weeks when the imbalance was the other way – this would then be a Market Maker choosing to establish a position rather than seeking to stay neutral.

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