Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

This site may earn commission on affiliate links.
So, are we in suspended animation in the middle of the Infinity Squeeze?

View attachment 619004

Serious answer - if we take the Closing Cross order imbalance as our best estimate of how many shares the indexes still need, then I'd say they got most of the way home today. Roughly 18M shares still needed.

Now in one context, that could be an awful lot of share price movement. Tesla completed their recent stock sale for ~8M shares in one day, and there was a $50 move that day.


Does that mean we have a $100 price move up on Monday? I doubt anything that big, for two reasons:
1) The indexes can return with a Market Open order and get some amount of shares as part of the Opening Cross. Whether there will be enough sellers then is also an open question. (So we'll want to watch the Opening Cross as well, and see what the demand, and imbalance, land at).

2) The indexes don't HAVE to all buy first thing on Monday morning. They can choose to drag out that buying to some degree.


Countering #2 - the motivation for index funds IS NOT maximizing return. They don't have (much) discretion on their buying and selling. And for the people that manage the index funds, they are rewarded on minimizing tracking error, not on beating the index. I tend to think there will be a bias towards buying any remaining shortfall they have as quickly as possible.

Countering the counter might be a recognition that waiting a little longer, maybe even a day, will help them fill their remaining shortfall at a price as close as possible to whatever the opening price is on Monday.
 
  • Like
Reactions: Cherry Wine
I wonder if benchmarked funds are the buyers at $680 - they are generating alpha for every share they buy below the on-close price of $695.

What's interesting is that for a while you kept seeing a large spread in the buys from 680 to 695.

I could just see the MM's saying "no no, I don't want it at $680, fill the order at $695 please" just to avoid tracking errors.
 
"alternative jones" on twitter is claiming 50 Million more shares to be bought on Monday

I don't know the source or methodology that yields this insight (details of which would be extremely valuable), but even the unsubstantiated claim is the beginning of information we need to accumulate over the weekend.

(For those of us that are also working short term positions - I realize that the HODLers don't care)
 
  • Like
Reactions: Big Time
Could someone explain what just happened like I'm 5?

A noob read of the situation -

Index buyers put in their buy MOC orders. Front runners put in their sell orders.

When NSDQ updated the imbalance at 1557 - we were at 655.
upload_2020-12-18_15-36-11.png


seeing the imbalance auction was initiated - this lifted closing indicative price to 704 as you can see.

More sellers came on board, dropped closing indicative price to 696. imbalance dropping from 16m to 12m
upload_2020-12-18_15-38-32.png


and this went on and on till they found as many as they could find.

closing cross price was then set at 695. Still about 12.5m shares short on the buy side. (edit)

Funny thing is - these closing cross orders are still getting executed at that 695 price much later when share price is down AH (see the 680s)
upload_2020-12-18_15-42-49.png



All in, we just gotta appreciate the capacity of the systems that handled this.
 

Attachments

  • upload_2020-12-18_15-38-7.png
    upload_2020-12-18_15-38-7.png
    100 KB · Views: 32
  • upload_2020-12-18_15-38-16.png
    upload_2020-12-18_15-38-16.png
    100 KB · Views: 40
Last edited: