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Overhang Clearance ahead of Afritin ?

The detailed and very gentlemanly disclosure by Wessy yesterday about his spreadbet position:-

so unfortunately I have been forced to liquidate £45k per point from the bet which equates to around 4.5m shares the Spread Bet company has had to sell. This has been dripped into the market, soaking most of the daily buys over this past week or so, starting on 24th and finishing today with the large trade (1.5m in total today ).

… now makes complete sense of what has been happening in the trading since last tuesday (24th Oct 2017). Each day is graphed below and the timely conclusion follows.

Tuesday 24th Oct


The first day when a late reported (next day) after hours trade showed up – 250K at at 9.50 at 4:32pm – this knocked the nett day position back to very close to zero.

Wednesday 25th Oct


300K late reported (next day) after hours trade at 9.3932p at 4:37pm – this knocked the nett day position back from +145K to – 155K (as those who commented at the time – the trading on this day was very confused so we must accommodate the possibility of a little misidentification of trade types, and hence precise nett trade position.)

Thursday 26th Oct


400K late reported (next day) after hours trade at 9.379p at 4:38pm.

Friday 27th Oct


No after hours trade reported YET.

Monday 30th Oct


800K late reported (2 days later) after hours trade at 9.63p at 4:40pm. This knocked the nett trade position back from +745K to very close to zero.

Tuesday 31st Oct


450K late reported (next day) after hours trade at 9.4613p at 4:35pm. This knocked the nett trade position back from +447K to very close to zero.

Wednesday 1st Nov


250K late reported (next day) after hours trade at 9.3p at 4:43pm.

Thursday 2nd Nov


50K after hours trade reported on the day. Buys exceed sells by 1.45M – expect that there is a c. 1.5M delayed sell YET TO BE REPORTED.

Summary

In Hours Buys In Hours Sells  In Hours Nett After Hours Buys After Hours Sells Expected Sells
Tuesday 24-10-17 692,890 458,408 234,482 50K 250K
Wednesday 25-10-17 1,070,095 924,460 145,635 100K 300K
Thursday 26-10-17 353,494 245,343 108,151 400K
Friday 27-10-17 1,148,432 322,296 826,136 500K
Monday 30-10-17 1,473,010 727,406 745,604 800K
Tuesday 31-10-17 1,027,504 579,992 447,512 450K
Wednesday 1-11-17 561,616 518,924 42,692 250K
Thursday 2-11-17  2,233,577 766,822  1,466,755  10K 50K 1500K
Totals 8,560,618 4,543,651 4,016,967 160K 2,500K 2,000K

 

In hours Buys minus In hours Sells are a touch over 4M since last tuesday. Add another 160K of after hours buys and the Market Makers need to find 4.18 Million shares.

So far there are 2.5M after hours sells declared. Wessy has confirmed that there were 1.55M sold yesterday (thursday the 2nd Nov), thus a 1.5M sell yesterday and a 500K sell on last friday, were they to appear, would perfectly account for all of the spreadbet sells relating to Wessy.

The days marked in green already show good neutrality established on a purely daily basis. If the expected spreadbet sells show up then that also restores neutrality on  last Friday and yesterday. Overall this would balance 4.18M of Buys with 4.5M of sells since last Tuesday.

Conclusion

Since last Tuesday, when the spreadbet selling first started it appears that daily neutrality has been established by the Market Makers – we may conclude that this is as a result of the ability to 1) buy the balance shares from the large spreadbet block and 2) that there is no clear indication as to which way the BMN share price will move in the period immediately following the Afritin demerger, which may of course have a happy coincidence with very strong Vametco production updates.

Now that the spreadbet overhang has been removed and MMs seems so clearly averse to taking any kind of exposed position it seems highly likely that strong buying in BMN today would result in a very strong SP appreciation – put simply the MMs will feel impelled to balance the books today and the only way that they can do that will be to raise the SP to get enough sellers to offset any buyers that arrive today.

Of course today may well be the last day to purchase BMN shares that would also automatically qualify for a free Afritin share 1:1 so there are other strong reasons to purchase today.

Updates

On Monday 6th Nov a 1.5M Sell was reported for Thursday the 2nd Nov. This was the final trade in the liquidation of the spreadbet hedge against Wessy’s bet and happened during the day, unlike all the previous balancing sells which happened after hours. It was also spotted that the 500K expected sell for last Friday was reported, delayed, on Monday. All the graphs here have been adjusted to include these delayed trade reports.

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