The Bushveld Perspective

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From the 19th Dec to the 5th of Jan

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

Summary

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
8M Total

Conclusion

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.

This article only conveys the personal opinion of the author. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. This article does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions.

Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000. See our full disclaimer

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Thank you for visiting the Bushveld Perspective, an archive of opinions from many private investors and commentators on the subject of Bushveld Minerals, which it is completely independent from.

The Bushveld Perspective holds no responsibility for your investment decisions and information written should not be relied upon in completing specific transactions. In particular the content does not constitute professional, financial or investment advice & must not be used as a basis for making investment decisions.

The content only conveys the personal opinions of our contributors. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000.

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This article only conveys the personal opinion of the author. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. This article does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions.

Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000. See our full disclaimer