10th Nov Flash Short – Week 1


19 November 2017

Monday 13th Nov

Following on from the afternoon short attack of the Friday the 10th November… You might describe it as somewhat Nervy.

Initially a couple of smallish buys kicked the Bid and Ask up to show an apparent +4% SP rise. This did not attract any significant quantities of traders and the recovery to pre-short levels stalled at that point.

A further 100K sell at 9:21AM seemed to be tolerated by the market makers, but when this repeated at 10:31AM they did respond by dropping the Bid. There was no resultant selling but a few more PIs (fatbanker, skibba) were able to buy at prices as low as 9.275p, even though the Bid had returned to 9.25p at that point. A large (192K) Sell then occurred just before noon, seemingly priced below the Bid level at the time of 9.25p – so perhaps this was a genuine PI Sell.

At 12:44:17 a PI sold 100K at 9.25p in order to recycle a T20 and this caused the Bid to drop from 9.25p to 9p. Interestingly the report of this trade was delayed by 10 seconds so that it appeared to have taken place at the same time as a PI Buy at 9.375p  – things seemed quiet until ten past one when a PI was able to buy at the all-day-low-buy-price of 9.225p (congratulations Knuttie). 45 minutes later though the Bid had dropped again back down to 8.75p but without any obvious justification – it may be that we see further delayed reports of shorting Sells at this point.

Evidently by 2pm the MM’s deep breathing exercises had worked and the Bid and Ask had returned to their earlier day highs. An uncrossing trade at 9.75p was thrown in, for reasons that may become apparent later in the week. and things remained stable for three quarters of an hour before a PI sell of 100K , followed closely by another, unknown, Sell of 100K kicked the MMs back into shorting avoidance mode, with the Bid dropping all the way back down to 8.75p. Again nothing seemed to happen for 20 minutes, when a 34K Sell popped up at 8.875p – again we might expect to see some delayed trades appearing in this period to explain how the price on sale dropped so heavily from 9.26p to 8.875p in this period.

BMNfan’s 162K Bed-ISA pair turned up on the Bid at 3:24pm and the afternoon continued to the close with buyers paying 9.3-9.375p. Another uncrossing trade (this time only 14K quantity) turned up at 9.75p just after hours – making the SP close at 9.75p – frankly illogical whilst the Ask was only 9.5p and Bid 8.875p (mid 9.125p).

Daily volume was 2.7M with 167K more Sells than Buys – essentially in balance, but perhaps with the short extended by 300K.

Tuesday 14th Nov

Following on from the short started on the previous friday afternoon and the very nervous behaviour of the Market Makers the previous day the share price opened apparently down 5% due to the previous day’s incorrectly reported 9.75p closing price.

Despite/maybe because of this trading opened with strong buying which was initially held in check by sells at 8.875p – at 8:12:50 by a Sell of 101,462 and then again at 8:29:18 with a Sell of 102,472. The sells stopped and the buying continued at a shade under 9.25p until 10am when the price being paid started to climb as the nett traded shares position moved above +500K.

The Bid then moved up and selling appeared to resume in the 9-9.1p band, with almost exclusive selling until 1:30pm bringing the nett trade position back down to +200K. At 1:28pm a Sell of 142,857 arrived and both the Bid and Ask were dramatically cut as the Market Makers moved again to counteract a possible short attempt. We have conservatively left our Bid-Accumulation line at 9.15p during this period but it is possible that some of the trades at 9.0p in the brief period between 1:28pm and 1:32pm were actually further Buys.

No matter, by 2:23pm the predictable flurry of Buys had returned the nett trade position back to +160K. The Ask was walked back up again but this time Sells did not return until a price of 9.25p was reached. Like a broom, Sellers at 8.875p, 9-9.1p and now at 9.25p, were swept out in Tuesday’s three selling cycles.

The SP finished at 9.25p, apparently down 5.1% on the previous day’s false SP finish of 9.75p, but in reality up 1.3% on the 9.125p which should have been reported. The volume was 2.485M – not markedly above the average of recent times, though the number of trades is clearly up. The nett trade position finished the day remarkably close to neutrality, though as explained previously the Buys may have been estimated slightly conservatively.

Wednesday 15th Nov

After the rather to-and-fro Monday and Tuesday, Wednesday started in the same vein – a 100K Sell right at the start of trading was followed by a period of regular buying before 9AM. At this point, albeit reported later, was a rapid period of buying and selling in 100K amounts – most probably a series of T20’s trades being rolled over. The slight imbalance in trades in this series brought about a drop in the Ask which then led to a number of good-value LTH top-ups before 11am.

The Ask rose back to 9.50p and the buying continued throughout lunch and to the mid afternoon. At which point a couple of medium sized sells (50K and 28K) led the Ask to drop back down to 9.25p again. NickDerby capitalised on this by pouncing on 100K shares at 9.025p and 9.1p and then there was almost exclusive buying before the close of trading.

The next day, Thursday a strange delayed trade of -686,000 at 9.02p appeared midway through the morning session – this was timed at 16:32:24 – just after the close of trading on Wednesday. What could be going on ? The LSE board had to wait until the end of trading on Thursday to find out more – when two further trades, also timed at 16:32:24, but for +686,000 at 9.02p. One of these is evidently cancelled out by the minus trade revealed earlier – but again this leaves a Wednesday ‘Sell’ of 686,000 timed just after the close of trading – this large trade helped knock the real nett trade position at the end of Wednesday back from more than + 500K to -253K.

The SP finished at 9.125p, down 1.3% on a volume of 2.7M (1.22M Buys vs 1.48M Sells).

Thursday 16th Nov

Thursday started relatively uneventfully – a few Buys and Sells in rough equilibrium until about 11am when the strange -686,000 trade described above appeared.

For no obvious reason the Bid was then dropped back to 8.75p – but not much happened until a strange Uncrossing Trade at 9.34p appeared at 2pm. Still not much happened until 3:13pm when the Ask was suddenly dropped down to 9p and 3 smallish Buys went through in the space of 5 seconds. 2 minutes later a Bushveld RNS was published with the long awaited title ‘Operational Update – Vametco Mine’ –  surely this must be the Q3 production figures we had all been waiting patiently/excitedly for?

But Q3 it was not – instead simply the release of updated resources figures based upon more detailed analysis and sampling of the Vametco seams. The LSE board cottoned on immediately and whilst there were a few Buys above 9.25p the Ask dropped back and it was possible to buy lower than this before the close of trading.

Guess what ? Our 16:32 time came around again and we were treated to a 400K trade at 9.00p – this turned an excess of Buys of 234K into a deficit of 166K. The next day, Friday two more 400K trades were reported (all positive 400K this time- one at exactly the same time and one 1 second later.) Given the previous day’s shenanigans with the +/- 686K might we expect one or both of these repeat 400K trades to be subsequently reversed. If both disappear then we have the very interesting set of coincidences described in the conclusion.

Owing to a second Uncrossing Trade at 9.34p the finishing SP was reported as that –  apparently +2.4% on the day, but in reality -1.3%. This was on a volume of 2.6M (885K Buys vs 1.7M Sells – though we might expect 2x400K to disappear from the Sell side).

Friday 17th Nov

Friday started with not one but two RNS’s – an update on the Imalato project and notice of the exercise of the 1.086M total outstanding warrants originally granted to Beaufort Securities.

After a couple of large Sells (240K, 100K) at 8.875p the Bid returned to 9p and a number of PI buyers reported being briefly able to buy at just above this level. By 11:30am the inital Sells had been offset and 9.25p was again being paid. A PI rolling over a T20 at 12:24pm helped knock the Ask back down to 9.25p and then again there was a period of cheap buying at prices under 9.1p. The nett trade position went positive and remained there for the rest of the day.

There was no repeat of the previous weeks short attempt.

Owing to the misleading closing price on Thursday the SP appeared to finish down 3.8% at 9p – though in reality this was really the same as the previous day’s mid-price. Friday volume was 1.54M (840K Buys vs 703K Sells).


SP Change TBP estimated Buys – Sells Potential Shorting Activity Comments
Monday 13-11-17 + 6.8% (actually Flat) – 167,111 3x 100K Sells
Tuesday 14-11-17 – 5.1% (actually +1.3%) – 17,002
Wednesday 15-11-17 – 1.3% – 253,517 After Hours 686K Sell
Thursday 16-11-17 + 2.4% (actually -1.3%) – 15,171 After Hours 3x 400K Sells
(But might change to 1x)
Friday 17-11-17 – 3.8% (actually Flat) + 136,339
Total – 1.3% – 0.32M


Last Friday we received a short attack of approximately 1.1M shares size. This Friday, following strong SP recovery we received notice of the exercising of a total of 1.086M warrants originally granted to Beaufort Securities (652,000 at 4.5p and 434,000 at 6.9p – though the RNS incorrectly stated 6.8p).

One might wonder if these events could be related  – for example a shorter, using the warrants as cover for the 10th November short, may have concluded that the short is not going to work and that therefore the warrants need to be exercised to provide the shares that need to be delivered.

The fact that the after hours trades on wednesday (sales of 686,000) and thursday (3x sales of 400,000 – but this may be multiple or incorrect restatements, 1x 400,00 seems much more likely given the nett trading position) sum to precisely the same number of shares (1.086M) may of course be a huge coincidence, or it may indicate that the warranted shares have somehow already been sold into the market.

We now have perhaps three coincidental events – the initial short, the exercising of warrants and the after hours trades on wednesday and thursday before the warrants RNS on friday. If these are all related they would seem to indicate that the short may have been open for no more than 3 days.

For these events to all be related we must consider how apparently warranted shares that appear to have been sold into the market to offset PI buys on wednesday and thursday may actually end up being being delivered instead to the PI buyers who mopped up the short sells of last Friday. Remember that the trade logs also show MM-to-MM trades so in the logs we may see the same share being transferred in the following ways:

  1. share sold by shorter to MM1
  2. share sold by MM1 to PI
  3. warrant holder exercises warrant and sells warranted share to MM2
  4. MM2 sells warranted share to MM1 to deliver the share needed by 1)

I will leave as an exercise for the reader to contemplate the order of operations that may have in fact occurred in this instance, and whether there is still some type of short squeeze yet to arrive.

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