Papafox's Daily TSLA Trading Charts

[EinSV]

thanks for the tag. honestly, i buried the lede far too deeply in that one.

i was sitting on the initial email far too long, so just asked for an update. when i got the response and finally looked at the graph after the weekend, i was stunned at the jump. pretty insane.

i'd also like to see what happens in the coming weeks (months?) with such a dramatic short interest.

Definitely an intriguing find!

I am a little surprised the financial press has not picked up on your story yet since they often run articles based on IHS/Markit data. But then again I am often surprised by what they find newsworthy, and not.

 

[Papafox]

We're still waiting for confirmation of the 40M+ shares sold short in mid-April, but if it is true we have a situation where the spring is as tight as can be and when it is sprung, you will see a truly impressive climb of TSLA. Although there are many perma-bears shorting TSLA at the moment, it's easy to see the short interest falling to 30M shares on a good-news climb, and that additional 10M shares of buying will have a huge effect on the SP because it is 10M shares of buying tacked on top of whatever rally sets the spring free to uncoil in the first place.

Looking at today's trading, you can see that it would have been the perfect setup for manipulations by shorts, i.e. a near-constant descent from opening until about 2pm, and yet shorts couldn't hold TSLA down today, it kept popping back up. Look at the generally-favorable pre-market trading, the early defeat of the mandatory morning dip, and the various dips that required sometimes more than 30,000 shares traded in a minute to engineer. In a way, the whole day was a game of "whack-the-mole" because any time TSLA ran for the green it was pulled back down and every time it dipped and recovered, that recovery was stopped just below or right at the red/green line. Further, I think the goal of the shorts was to keep TSLA below 284 today because that is a key technical number. With that little dip in the closing minutes (while the NASDAQ was climbing), shorts used whatever ammo was needed to knock TSLA below 284, but the stock remained in the green for the day, suggesting at least a partial victory for longs. Considering how poorly the broader indexes did today,

The NASDAQ had a constant descent for most of the day but shorts couldn't leverage it to push TSLA down, only to keep TSLA from running higher

Because TSLA appears to be loaded beyond realistic capacity with shares sold short and because shorts (using lots of effort) couldn't push TSLA down on a day with a constant macro decline, I'm going to agree with Option_Sniper that TSLA looks ready for a reversal.

Conditions:
* Dow down 425 (1.74%)
* NASDAQ down 121 (1.70%)
* TSLA 283.46, up 0.09 (0.03%)
* TSLA volume 5.3M shares
* Oil 67.72, down 0.92 (1.34%)

 

[ZachShahan]

Definitely an intriguing find!

I am a little surprised the financial press has not picked up on your story yet since they often run articles based on IHS/Markit data. But then again I am often surprised by what they find newsworthy, and not.

IHS/Markit is good about blasting out interesting little summaries about this stuff. That's what the email I received a month or so ago was. Can only imagine how many news agencies those reach.

I doubt nearly as many such news outlets saw my piece. Even if they did, they may not have felt that they trusted the source (wasn't from IHS/Markit directly and I had to modify the chart to add a title and credit), and I did bury the lede a bit ...

Anyhow, I think it is one of the more fascinating bits of news I've seen on TSLA in the past year. The spike is insane on a stock already so heavily shorted and at such a critical point in its evolution.

I should follow up on the matter soon. Super interesting portion of the story.

 

[Papafox]

I'll take a stab at the article. Starting it now. I have one hour max.

There's a chance another well-qualified individual might write it. We are in communications. One of us will. The idea is to have the article written so that when the actual short interest number is released, we're ready to go if it is as high as we suspect.

 

[ZachShahan]

View attachment 296477
We're still waiting for confirmation of the 40M+ shares sold short in mid-April, but if it is true we have a situation where the spring is as tight as can be and when it is sprung, you will see a truly impressive climb of TSLA. Although there are many perma-bears shorting TSLA at the moment, it's easy to see the short interest falling to 30M shares on a good-news climb, and that additional 10M shares of buying will have a huge effect on the SP because it is 10M shares of buying tacked on top of whatever rally sets the spring free to uncoil in the first place.

Looking at today's trading, you can see that it would have been the perfect setup for manipulations by shorts, i.e. a near-constant descent from opening until about 2pm, and yet shorts couldn't hold TSLA down today, it kept popping back up. Look at the generally-favorable pre-market trading, the early defeat of the mandatory morning dip, and the various dips that required sometimes more than 30,000 shares traded in a minute to engineer. In a way, the whole day was a game of "whack-the-mole" because any time TSLA ran for the green it was pulled back down and every time it dipped and recovered, that recovery was stopped just below or right at the red/green line. Further, I think the goal of the shorts was to keep TSLA below 284 today because that is a key technical number. With that little dip in the closing minutes (while the NASDAQ was climbing), shorts used whatever ammo was needed to knock TSLA below 284, but the stock remained in the green for the day, suggesting at least a partial victory for longs. Considering how poorly the broader indexes did today,

View attachment 296479
The NASDAQ had a constant descent for most of the day but shorts couldn't leverage it to push TSLA down, only to keep TSLA from running higher

View attachment 296480
Because TSLA appears to be loaded beyond realistic capacity with shares sold short and because shorts (using lots of effort) couldn't push TSLA down on a day with a constant macro decline, I'm going to agree with Option_Sniper that TSLA looks ready for a reversal.

Conditions:
* Dow down 425 (1.74%)
* NASDAQ down 121 (1.70%)
* TSLA 283.46, up 0.09 (0.03%)
* TSLA volume 5.3M shares
* Oil 67.72, down 0.92 (1.34%)

I think there are a lot of people treating this as a big opportunity to buy, and potentially the last one in this territory, so think that keeps boosting the price as it drops. I expect a lot of others are still waiting on a "perfect" opportunity if it will just drop a bit more. Prepping for a cross-continental move, I'm really not supposed to be buying stock right now, but am super tempted to...

 

[ZachShahan]

I'll take a stab at the article. Starting it now. I have one hour max.

Sweet. I'm probably getting off soon (am in Europe and wife & 1.5 year old daughter in the hospital due to a big, unexpected allergic reaction yesterday), but will check in here in the morning to get it online and tie up any necessary details. Just DM me.

 

[EinSV]

Cross-post from the Market thread.

Short interest as of 4/13 was a whopping 38.2M shares — up 10M shares in just one month. Short Interest Tables - WSJ.com

This suggests the data posted by @ZachShahan at CleanTechnica from IHS/Markit showing current short interest is now over 40M shares is very likely correct.
Tesla [TSLA] Now Really A Dramatically Shorted Stock (#CleanTechnica Exclusive) | CleanTechnica

PS Not sure why the data is not at nasdaq.com yet but found it on the wsj website.

 

[Papafox]

On Tuesday, 56% of TSLA selling was done by shorting.

Also, I sent Zach my article. Thank you EinSV for the useful update!

 

[Mich]

Is there any way to know how many shares are traded daily? I mean net shares traded, not volume. Shared traded multiple times a day counted only once. This would be a really interesting number to know how much 10m really is. This would be the real "days to cover" indicator.

 

[MacRocket]

WOW, 40M shares shorted, hard to believe.

TSLA has about 170M shares total.
Elon has 38M shares.
The top 5 institutinal shareholders own around 53M shares.
Remaining institutions hold 46M shares.
This leaves small investors holding the balance of 33M shares

The $99 question now is who will sell to the shorts when they want to cover?
Elon and the top five probably won’t.
That’s 91M shares locked up.

Only 79M shares left and 40M shorted.
Some of the smaller institutions may sell for a price but they only hold 46M shares, I doubt they would all be willing to sell.

So what will small investors do?

I added to my long term holdings during the recent dip. These are my shares now, I won’t be selling any of my shares back to shorts. I wonder if many others have this same approach.

The shorts will need half the small shareholders and half the small institutions to sell to them to cover their positions.

I see a massive short squeeze coming.

If Elon can get a profit in the second half and new buyers emerge then this will make things much much worse for the shorts.

What do you think Papafox?

Is there any chance that some shorts will default and cause longs not to get their shares back?

 

[gora321]

WOW, 40M shares shorted, hard to believe.

TSLA has about 170M shares total.
Elon has 38M shares.
The top 5 institutinal shareholders own around 53M shares.
Remaining institutions hold 46M shares.
This leaves small investors holding the balance of 33M shares

The $99 question now is who will sell to the shorts when they want to cover?
Elon and the top five probably won’t.
That’s 91M shares locked up.

Only 79M shares left and 40M shorted.
Some of the smaller institutions may sell for a price but they only hold 46M shares, I doubt they would all be willing to sell.

So what will small investors do?

I'm not selling my 9 shares...but it is interesting to watch development

 

[Johan]

Is there any chance that some shorts will default and cause longs not to get their shares back?

This is not possible, the market maker would be left holding the bag - since blatant naked short selling (taking up a short position without securing it with the broker) is illegal. This is also one of the mechanics behind a short squeeze: if someone takes up a short position and the stock price keeps rising they will be gradually forced by their broker to secure their potential loss either through having more and more cash in their account or through giving the lender some other security, which in reailty often is that the broker is allowed to liquidate other positions you may be holding to cover your short. The process by which the increased stock prices thus forces the holder of the short position to add more and more security in order to keep holding the position is the actual "squeezing". This also goes for opening short position option trades (selling calls or buying puts).

Naked short selling - Wikipedia

 

[AlMc]

Good to see you posting @Johan

 

[ggr]

This is not possible, the market maker would be left holding the bag - since blatant naked short selling (taking up a short position without securing it with the broker) is illegal. This is also one of the mechanics behind a short squeeze: if someone takes up a short position and the stock price keeps rising they will be gradually forced by their broker to secure their potential loss either through having more and more cash in their account or through giving the lender some other security, which in reailty often is that the broker is allowed to liquidate other positions you may be holding to cover your short. The process by which the increased stock prices thus forces the holder of the short position to add more and more security in order to keep holding the position is the actual "squeezing". This also goes for opening short position option trades (selling calls or buying puts).

Naked short selling - Wikipedia

Assuming the short position wasn't naked, the broker can also decide to cover by buying-to-close the short position. That, of course, contributes to the squeeze.

 

[Waiting4M3]

WOW, 40M shares shorted, hard to believe.

TSLA has about 170M shares total.
Elon has 38M shares.
The top 5 institutinal shareholders own around 53M shares.
Remaining institutions hold 46M shares.
This leaves small investors holding the balance of 33M shares

The $99 question now is who will sell to the shorts when they want to cover?
Elon and the top five probably won’t.
That’s 91M shares locked up.

Only 79M shares left and 40M shorted.
Some of the smaller institutions may sell for a price but they only hold 46M shares, I doubt they would all be willing to sell.

So what will small investors do?

I added to my long term holdings during the recent dip. These are my shares now, I won’t be selling any of my shares back to shorts. I wonder if many others have this same approach.

The shorts will need half the small shareholders and half the small institutions to sell to them to cover their positions.

I see a massive short squeeze coming.

If Elon can get a profit in the second half and new buyers emerge then this will make things much much worse for the shorts.

What do you think Papafox?

Is there any chance that some shorts will default and cause longs not to get their shares back?

Shorts think all TSLA longs should be institutionalized, so institution ownership is really 100%

 

[adiggs]

WOW, 40M shares shorted, hard to believe.

TSLA has about 170M shares total.
Elon has 38M shares.
The top 5 institutinal shareholders own around 53M shares.
Remaining institutions hold 46M shares.
This leaves small investors holding the balance of 33M shares

The $99 question now is who will sell to the shorts when they want to cover?
Elon and the top five probably won’t.
That’s 91M shares locked up.

Only 79M shares left and 40M shorted.
Some of the smaller institutions may sell for a price but they only hold 46M shares, I doubt they would all be willing to sell.

So what will small investors do?

I added to my long term holdings during the recent dip. These are my shares now, I won’t be selling any of my shares back to shorts. I wonder if many others have this same approach.

The shorts will need half the small shareholders and half the small institutions to sell to them to cover their positions.

I see a massive short squeeze coming.

If Elon can get a profit in the second half and new buyers emerge then this will make things much much worse for the shorts.

What do you think Papafox?

Is there any chance that some shorts will default and cause longs not to get their shares back?

There is one piece missing in your math @MacRocket but the overall conclusion remains the same (at least for me).

Namely - the 41M shares shorted become "new" shares in the market that are owned by somebody. So 170M Tesla shares with another 40M short means there are holders of 210M Tesla shares in the market. In a sense, when you establish a short position, you are manufacturing new shares of the company and as the manufacturer of the shares, you are responsible for satisfying them on demand.

That means at the end, you have 119M shares left with 40M shorted - better looking than your conclusion, and if I were thinking about shorting the company, a ratio that would still freak me out. At the limit, the people that are short need to acquire 1/3rd (instead of 1/2) of all of the trading shares of the company on demand.

 

[Papafox]

I continue to believe that TSLA is getting ready to start climbing. The dip below 284 was a manufactured dip, only possible with more than half the selling done by shorts, and now in a super-low volume environment on a mixed macros day, the shorts huffed, and they puffed, but they couldn't get any kind of panic-selling going in the longs. Look at the extent of the dip after 10am and how quickly the stock returned to the green. Look at the low volume. Look at the recoveries from today's other dips. Of particular note is the near linear climb from 2pm until the close of after-market trading today, where TSLA closed down a mere 68 cents for the day. For the past two days, shorts who manipulated this stock lost money because of no convenient low exit point) and time is running out before the Q1 ER. I would not be surprised if a good portion of that after-hours buying was covering by the manipulative shorts. When I see after-hours trading like this, I really look forward to the next trading day. Fingers crossed.

My Clean Technica article should appear tomorrow morning.

Conditions:
* Dow up 60 (0.25%)
* NASDAQ down 4 (0.05%)
* TSLA 280.69, down 2.77 (0.98%)
* TSLA volume 3.9M shares
* Oil 68.35, up 0.30 (0.44%)
* Percentage of trading by TSLA shorts: 57%

 

[MacRocket]

The Fascinating Tesla Short Story | CleanTechnica

Love this story from one of our own TMC regulars.

 

[Papafox]

The Fascinating Tesla Short Story | CleanTechnica

Love this story from one of our own TMC regulars.

... and excellent additional info from Johan and adiggs.

 

[mongo]

There is one piece missing in your math @MacRocket but the overall conclusion remains the same (at least for me).

Namely - the 41M shares shorted become "new" shares in the market that are owned by somebody. So 170M Tesla shares with another 40M short means there are holders of 210M Tesla shares in the market. In a sense, when you establish a short position, you are manufacturing new shares of the company and as the manufacturer of the shares, you are responsible for satisfying them on demand.

That means at the end, you have 119M shares left with 40M shorted - better looking than your conclusion, and if I were thinking about shorting the company, a ratio that would still freak me out. At the limit, the people that are short need to acquire 1/3rd (instead of 1/2) of all of the trading shares of the company on demand.

I may be off here, edit: I think I was, but keeping this for posterity. but I think your point regarding share reallocation is valid regarding counting, but not share availability.
Example: company has 100 shares total, brokerage owns 40, CEO has 30, and everyone else has 30. Now if brokerage lets someone short sell 10, the numbers of in-hand shares are 30 for brokerage, 30 for CEO, and 40 for everyone else. The loaned shares are no longer in play by the brokerage and a short cannot buy them to close their position.

Extreme case: float of 100 shares, everyone uses the same brokerage. Through a series of 40% margin transactions backed by cash or other stock, there are 200 shares shorted (due to the brokerage loaning them multiple times due to everyone having their accounts there). There are 300 entries, but only 100 shares are in people's accounts, along with 200 owed shares. When the shorts try to cover, there are only 100 shares available for them to purchase from.
Edit: it could be that there are 300 'shares' in people's accounts, but only 100 real shares at the brokerage. Like a bank, as long as you can pull 'your' money out, you don't care how full the vault is. So there are 300 possibilities for repurchase.

So how does the accounting work? The outstanding number can't change. And the float number is the outstanding minus CEO/restricted shares, so it is fixed also. If the brokerage reports the total number of shares it is responsible for (loaned and in-hand) then the sum of everyone will be more than the float. If they only report in hand shares, then the total will be the float.