Schwab Trolling For Shares

[Putncalls]

RJ will not lend my sure because they are paid for. They will only lend shares on margin and they keep all the interest

[CesiumFormate]

Schwab called again today wanting to borrow shares. It seems to me that it has to be pretty risky for the shorts right now. Good news seems to be expected, even if it is potentially a month or so out. If I were them I would want to sell shares and buy long calls. I was researching the Volkswagon short squeeze. It is interesting. There was no major accretive activity. Once the shorts realized they were in too deep the stock went up five times. Imagine what can happen with an accretive announcement! Maybe hedge funds are assuming that the institutions are going to take money off the table. This would provide some liquidity. If IOC is substantially revalued and derisked at the same time, they may just hold. A full sell down could put it above $200 with a new floor. If we see a VW spike of 5X, that would be $1000 per share on a squeeze. Could it happen with a full sell down accretive deal? Everyone seems to be dug into their positions. The longs aren't selling, and intra-day naked shorting is pretty risky. Volume is relatively low so days to cover is approaching 35+. There just may be someone out there driving a Porsche ready to buy them up.

[Movieguy]

Schwab called again today wanting to borrow shares. It seems to me that it has to be pretty risky for the shorts right now. Good news seems to be expected, even if it is potentially a month or so out. If I were them I would want to sell shares and buy long calls. I was researching the Volkswagon short squeeze. It is interesting. There was no major accretive activity. Once the shorts realized they were in too deep the stock went up five times. Imagine what can happen with an accretive announcement! Maybe hedge funds are assuming that the institutions are going to take money off the table. This would provide some liquidity. If IOC is substantially revalued and derisked at the same time, they may just hold. A full sell down could put it above $200 with a new floor. If we see a VW spike of 5X, that would be $1000 per share on a squeeze. Could it happen with a full sell down accretive deal? Everyone seems to be dug into their positions. The longs aren't selling, and intra-day naked shorting is pretty risky. Volume is relatively low so days to cover is approaching 35+. There just may be someone out there driving a Porsche ready to buy them up.

Thanks for your research regarding VW.  What was the reason for the squeeze?  How long did the shares trade at around 5x the previous price?  Minutes?  Hours?  Days?

[CesiumFormate]

Schwab called again today wanting to borrow shares. It seems to me that it has to be pretty risky for the shorts right now. Good news seems to be expected, even if it is potentially a month or so out. If I were them I would want to sell shares and buy long calls. I was researching the Volkswagon short squeeze. It is interesting. There was no major accretive activity. Once the shorts realized they were in too deep the stock went up five times. Imagine what can happen with an accretive announcement! Maybe hedge funds are assuming that the institutions are going to take money off the table. This would provide some liquidity. If IOC is substantially revalued and derisked at the same time, they may just hold. A full sell down could put it above $200 with a new floor. If we see a VW spike of 5X, that would be $1000 per share on a squeeze. Could it happen with a full sell down accretive deal? Everyone seems to be dug into their positions. The longs aren't selling, and intra-day naked shorting is pretty risky. Volume is relatively low so days to cover is approaching 35+. There just may be someone out there driving a Porsche ready to buy them up.

Thanks for your research regarding VW.  What was the reason for the squeeze?  How long did the shares trade at around 5x the previous price?  Minutes?  Hours?  Days?

It was over a couple of days.  Take a look at this artlcle on Wikipedia.  It has all the details and links.  The important thing is that it took a month to settle back down, and it settled back to the pre-squeeze price.  Most likely because the fundaments of VW had not changed.  It was only the knowledge that Porsche had 79%+ of the shares and there was essentially no float

http://en.wikipedia.org/wiki/Short_squeeze

CF

[Palm]

Shorts really desperate. Today I received emails for 2 of my IRA accounts; Schwab is asking for more shares to be made available for lending. Crazy thing is that these accounts don't hold all that many shares. Scraping hard for shares. Plus I didn't think shares held in an IRA account are eligible for lending.

Shorts doing all they can to keep lid on this thing. Must be another article coming out later today or tomorrow. OE is tomorrow.

[CesiumFormate]

There was a short attack each day after my family member was asked for shares from Scwab. My guess is there are uncovered calls that will need to be covered before end of day tomorrow.

[katytrader]

Shorts really desperate. Today I received emails for 2 of my IRA accounts; Schwab is asking for more shares to be made available for lending. Crazy thing is that these accounts don't hold all that many shares. Scraping hard for shares. Plus I didn't think shares held in an IRA account are eligible for lending. Shorts doing all they can to keep lid on this thing. Must be another article coming out later today or tomorrow. OE is tomorrow.

Schwab just told me that shares held in an IRA are not eligible for share lending.  Shares held in an account which is all paid and even in a margin account with a cash balance they would not lend ...UNLESS......the account holder explicitly signed up for the share lending deal.

katytrader

[Palm]

Can't be many shares left for them to scrounge. The spring is getting wound very tightly.

[Palm]

Shorts really desperate. Today I received emails for 2 of my IRA accounts; Schwab is asking for more shares to be made available for lending. Crazy thing is that these accounts don't hold all that many shares. Scraping hard for shares. Plus I didn't think shares held in an IRA account are eligible for lending. Shorts doing all they can to keep lid on this thing. Must be another article coming out later today or tomorrow. OE is tomorrow.

Schwab just told me that shares held in an IRA are not eligible for share lending.  Shares held in an account which is all paid and even in a margin account with a cash balance they would not lend ...UNLESS......the account holder explicitly signed up for the share lending deal.

katytrader

Yep, just got same answer, yet they sent a request on these 2 IRA accounts. Seems they'd be more careful. Will be some people who try and sign up then get told sorry. Bad move Chuck

[katytrader]

Shorts really desperate. Today I received emails for 2 of my IRA accounts; Schwab is asking for more shares to be made available for lending. Crazy thing is that these accounts don't hold all that many shares. Scraping hard for shares. Plus I didn't think shares held in an IRA account are eligible for lending. Shorts doing all they can to keep lid on this thing. Must be another article coming out later today or tomorrow. OE is tomorrow.

Schwab just told me that shares held in an IRA are not eligible for share lending.  Shares held in an account which is all paid and even in a margin account with a cash balance they would not lend ...UNLESS......the account holder explicitly signed up for the share lending deal.

katytrader

Yep, just got same answer, yet they sent a request on these 2 IRA accounts. Seems they'd be more careful. Will be some people who try and sign up then get told sorry. Bad move Chuck

As a footnote, the Schwab fellow did allow that were the shares held in a margin account in which margin was being used, they might lend the shares, but would recall the lent shares were the acccount to wing back to having a positive cash balance.   This need to keep things tidy  might account for some of the trolling.