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mershaw2001
I'm short the short sellers
Why would you have to pay for this? I thought they pay you. And if the current lend rate is 1.25% annually, that's less than .2% per month which barely makes up the 25 dollars on 100 shares. You must have a ton of shares, but even still why pay 25 dollars?
The fee is for a market data subscription that is required in order to access the Borrow/Lend Shares functionality. Yea, I have enough shares to make it worthwhile, hoping that the lending rate increases as well. As we know from earlier this year, the lending rate can spike dramatically as the number of shares available approaches 0.
Don't do it. All you are doing is increasing the supply of shares on the market. Higher supply = lower share price: Econ101.
separate note: with TSLA down 35%, the increase in short interest in the amount of shares, does not equate to an increase in dollar amount. Matter of fact the $ amount is still roughly the same since last month.
Causalien
Prime 8 ball Oracle
Gen3. It'll depend on how much you get. I'd say 20% interest is a healthy amount. Anything other than that, options provide a better solution. TSLA's options entered a new type of insanity that I am scratching my head over. For example, there isn't any difference in the options price for any 2016 option right now. I'd sell that volatility.
If you lend them out today, you will get the 1.25%. If the interest rate goes up next week to 100% then I don't think you will collect 100%, because after all you already lent them out today at 1.25%. I don't know how this works, but I don't think you get a variable interest rate on the shares (I could be wrong though, but that wouldn't make sense to me). I would wait to see that high interest rate before I lend out the shares.
It is a daily arrangement. You can call back your shares, and those short have 3 days to deliver.
Some days the counterparty will agree to renew at the same rate, and other days they'll give you back your shares. It takes quite a bit of effort to keep track of on a daily basis, which is why Securities Lending desks are profitable enterprises.
When the lending rate is high, shorts do not like to hold their position over the weekend. If you remember the "Tesla Tuesdays" trend to be down on Tuesdays was due in large part to the high borrow rate, and Shorts piling in Tuesday to get 3 days exposure until Friday.
Thanks for the explanation. Rememeber that by lending shares out you are increasing the supply of shares to short (or simply sell by the institution) so you are putting downward pressure on the price of TSLA with this move. It is a double edged sword.
Care to elaborate on the options comment? I actually have been buying 2016 options and you saying to sell?
Hard to say no to that almost risk-free extra return. Maybe I'll end up buying my GenIII with the interest paid by shorts, rather than selling shares to buy it...
The only scenario where I would miss out on a TSLA share gain, would be a VW type squeeze buy-out. Where my counterparty could fail to deliver. However, the entire account of the counterparty would have to get wiped out to cause this to happen, very unlikely.
Additionally, I would be up 2% on the day, as I'd keep the counterparty's cash worth 102% of the prior days closing price that was kept as collateral in case of the above event happening.
Causalien
Prime 8 ball Oracle
They are all priced very similarly as if it doesn't matter which strike you buy. Intrinsic value account for very little. If you go from the current ITm and go to $300. Option price differs probably by $20. I am implying to sell the very deep OTM options. But ended up just buying stock instead because thise 2016 options are too expensive.
Ah, but what if s/he wants the price to go down so that s/he has a long-run buying opportunity? What about that? :wink: As Warren Buffet has said, if he isn't planning to sell anytime soon, he prefers a stock price to stay low so he can buy more...
Schwab allows me to lend my shares for, uh, no fees -- they pay me, period. However, my shares only get lent if someone wants to short-sell them and there aren't enough shares in margin accounts to lend. Schwab asked me to lend them back during the period of *really* high short interest, but I hadn't signed the paperwork yet. Since I finished signing the paperwork and setting up the securities lending thing, I haven't been asked to lend them, indicating that there isn't enough short interest. Hopefully the shorts will move in in force and start paying me. I'm in for the long term, and they'll eventually give up, whether it's this year or five years from now...
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Are you looking at calls or puts? The puts seem to have meaningful differences in option price depending on strike price.
Short interest as of 11/29/13
Short interest as of 11/29/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 11/29/13 settled date is reflective of short interest as the end of trading on 11/26/13.
So as of 11/26/13, 29.15m out of 80.91m shares of the float were short OR 36.0% of the float was short.
Short interest as of 11/29/13 (settled date) was published today (Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com). Since it takes 3 business days to settle, the 11/29/13 settled date is reflective of short interest as the end of trading on 11/26/13.
So as of 11/26/13, 29.15m out of 80.91m shares of the float were short OR 36.0% of the float was short.
| Settlement Date | Short Interest | Avg Daily Share Volume | Days To Cover |
|---|---|---|---|
| 11/29/2013 | 29,155,653 | 14,276,160 | 2.042262 |
| 11/15/2013 | 25,390,455 | 16,974,121 | 1.495833 |
| 10/31/2013 | 21,419,497 | 9,851,553 | 2.174225 |
| 10/15/2013 | 20,813,894 | 13,356,976 | 1.558279 |
| 9/30/2013 | 20,931,318 | 8,540,203 | 2.450916 |
| 9/13/2013 | 21,021,797 | 9,055,308 | 2.321489 |
Wow! I was pretty much spot on with my estimate above. I agree with MikeC to some extent that some of the shorts were shaken out last week on Tuesday on that 20 point move but believe many new shorts may also have come back into place since Tuesday.
i think another short squeeze is in the making here if we get another couple of good catalysts...can't wait, very excited for this.
TSLA is getting extremely hard to find locates for retail investors again to short. This is I believe a leading indicator to potential for another short squeeze. We shall see on Xmas eve what the data looks like for 12/13 settlement date (end of trading day on Tuesday 12/10) which may not be much higher (or slightly lower) than the 29mm from the last report because there was that mini squeeze in between with the MS report, but I suspect it has crept up since last week and that the report release on Jan 10th will show short interest for end of trading on Thursday Dec 26th (Settlement Tues the 31st) that it could be well above 30mm shares held short.
unless that is another mini short squeeze (ie. 10 point+ move up) occurs between now and Thursday Dec 26th which is possible.
mershaw2001
I'm short the short sellers
WOW Fidelity has exactly 15 shares to short. That's it! Down from a million before, and the rate has increased from 1.5% to 4.5%!!!!!!!!
Mario Kadastik
Active Member
As I wasn't on the forum yet during the epic short squeeze setup of early 2013, does anyone remember what amount of the float was short and what the rates were just before the huge balloon up?
Like 85% interest rate or so vs. 4.5% now , also about 30m shares short, but days to cover was about 8 vs. 2 now.
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