The 19th of December saw the first recent appearance of what I believe are end of day sells – we saw something similar in early November when Wessy was closing his spreadbet long position and the spreadbet company needed to sell 4.5M shares into the market. The shot of the trade log below shows an example of an end of day trade – here for yesterday’s trading, friday the 5th Jan.
In both situations strong PI buying during the day has led to a significant excess of Buys over Sells during the day – in both situations this has been almost entirely wiped out by a large trade, which I believe to be a sell, after hours but at prices which are much closer to the SP mid-price than any independent PI seller would get. It would appear that the market makers offer such competitive pricing as a quid-pro-quo for any large seller willing to put large blocks of shares into their hands for ad-hoc disposal.
I list below the daily trading plots and then explore how the Market Maker Trading position is affected and how I come to this conclusion about the nature of the end day trades.
Tuesday 19th Dec
Wednesday 20th Dec
Thursday 21st Dec
Friday 22nd Dec
Wednesday 27th Dec
Thursday 28th Dec
Friday 29th Dec
Tuesday 2nd Jan
Wednesday 3rd Jan
Thursday 4th Jan
Friday 5th Jan
The end day trades, highlighted in green on the charts above are summarised thus:
|SP||TBP estimated Buys – Sells||End Day Trades|
|Tuesday 19-12-17||8.75||+2.09M more Buys than Sells||2x 1.75M|
|Wednesday 20-12-17||8.75||+1.52M more Buys than Sells||2x 1.25M|
|Wednesday 27-12-17||8.625||+41K more Buys than Sells||2x 250K|
|Friday 5-1-18||8.25||+ 1.39M more Buys than Sells||1x 1.5M|
If you ignore the end day trades, for example by asserting that for the paired end-day trades that one is a buy and the other a sell (perhaps market-maker to market-maker), then you end up with the nett trading and Market Maker trading positions as shown below:
This would yield a market maker short position that has grown from c. 3.5M shares on the 19th of December to over 7M shares now.
Alternatively if you assert that the end day trades are all Sells then you end up with the very different picture shown below.
The Market Maker short position c 3.5M shares, developed since the 30th November, was able to be closed by the End Day Sells of the 19th and 20th December and since then the Market Makers have been operating a close to neutral position with any strong buying simply being fed with an End Day Sell.
This scenario seems more plausible, and would also perhaps explain how the Market Makers were able to so confidently absorb the very strong buying (2M more Buys than Sells) of the 30th November (the day the Yellow Dragon Buyout deal was first announced) by developing their own short position of c. 3.5M size – basically they knew that they had a captive Seller lined up ready to feed them whatever they needed, when they needed it.