Shorts?? Really??
Post# of 154
Posted On: 10/28/2015 12:34:28 PM
The ‘Junior’ exploration market is a volatile place at the best of times. An exceptional example of that is the recent activity in the Explor Resources Canadian market (EXS). As the word spread that Teck was about to commence drilling operations at the Timmins Porcupine West site, buying in the equity rose sharply, along with the price, peaking briefly at .09 on respectable volume.
Just as rapidly, the equity declined as every bid was filled the instant it appeared, sitting at .06 as I write this post. For those of us that believed we were about to break into double digits, the rapid decline came as a bit of a shock. We all questioned the decision we made to buy the stock…we doubted those that suggested we buy the stock. Why on such long awaited news did the equity do such a nosedive???
The obvious answer is some investors took profit on their entire position or minimized risk by selling a portion of their investment at a profit. The second obvious conclusion is that some investors sold their position to create the cash to buy in to a proposed 'Flow Through' financing Chris Dupont, the Company's President, is working on. As we approach year end, a large number of miners offer this type of placement to raise exploration funds. That kind of selling into the EXS market would be ‘short to the underwriting’.
However, the Big Red Flag for me is the bids set currently at .05. On Friday they were set at .05 & .055 for a total of one million shares. The question that springs to mind is this…If a real buyer wants that amount of stock, why wouldn’t that ‘buyer’ go to the offer to obtain it? Alternatively, why not participate in the proposed Private Placement??
Take a look at the big sellers on the run up. Now take a look at the ‘big’ buyers at .05. Gosh, it appears to be the same guys! A massive short into a sub .10 market?? The size of the bid suggests then the extent of the selling. If their average short sale was say .075, that would be a credit of $75,000 in the trading account. If in fact we are stupid enough to sell them our stock at .05, and they cover their short position, they will have made $25,000!!!
DO NOT SELL YOUR STOCK!! Do not offer your stock for sale. Just like the rest of us, they have to either deposit cash and/or tie up equity to hold their short position, or they have to cover the short within a specified time frame. If we don’t sell into their short, eventually they will be forced by the brokerages to cover that short AT THE MARKET!!!
If we, collectively, as real investors in this company follow this thinking, the stock could easily top previous highs by trapping these shorts. What would perpetuate even more rapid movement to the up side would be some aggressive buying from all of us…
Just as rapidly, the equity declined as every bid was filled the instant it appeared, sitting at .06 as I write this post. For those of us that believed we were about to break into double digits, the rapid decline came as a bit of a shock. We all questioned the decision we made to buy the stock…we doubted those that suggested we buy the stock. Why on such long awaited news did the equity do such a nosedive???
The obvious answer is some investors took profit on their entire position or minimized risk by selling a portion of their investment at a profit. The second obvious conclusion is that some investors sold their position to create the cash to buy in to a proposed 'Flow Through' financing Chris Dupont, the Company's President, is working on. As we approach year end, a large number of miners offer this type of placement to raise exploration funds. That kind of selling into the EXS market would be ‘short to the underwriting’.
However, the Big Red Flag for me is the bids set currently at .05. On Friday they were set at .05 & .055 for a total of one million shares. The question that springs to mind is this…If a real buyer wants that amount of stock, why wouldn’t that ‘buyer’ go to the offer to obtain it? Alternatively, why not participate in the proposed Private Placement??
Take a look at the big sellers on the run up. Now take a look at the ‘big’ buyers at .05. Gosh, it appears to be the same guys! A massive short into a sub .10 market?? The size of the bid suggests then the extent of the selling. If their average short sale was say .075, that would be a credit of $75,000 in the trading account. If in fact we are stupid enough to sell them our stock at .05, and they cover their short position, they will have made $25,000!!!
DO NOT SELL YOUR STOCK!! Do not offer your stock for sale. Just like the rest of us, they have to either deposit cash and/or tie up equity to hold their short position, or they have to cover the short within a specified time frame. If we don’t sell into their short, eventually they will be forced by the brokerages to cover that short AT THE MARKET!!!
If we, collectively, as real investors in this company follow this thinking, the stock could easily top previous highs by trapping these shorts. What would perpetuate even more rapid movement to the up side would be some aggressive buying from all of us…
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