RE: Qube - new short positionToday 13:46
I'm not sure how to look at the Qube short position.
If you check last two big shorts made by Qube since October 2023 - HSBC & Barclays - both were as I think a big costly mistakes.
0.57% from 9th of May represent about 22.8 million ITV shares. So, you have to ask yourself - if this is a typical short position, isn't Qube making a mistake once again (which is already costing them a few%)? Or maybe it is the same as in the case of "the Canada Pension Plan Investment Board" (at least as I believe), that it is another open hedging for investing in ITV shares which they are bought.??
Assuming that although most people here probably know what I'm talking about, I will briefly explain how it works.:
You buying shares and opening short positions for the same number of shares (sometimes more or less depending on the risk you are betting on and legal restrictions). In a 1:1 situation, you only bear the possible costs of maintaining short positions. Assuming a strong increase in the value of shares - on the one hand, you lose on your short position, but balance it with an increase in the value of your shares.
In the event of a change price trend into the downward trend, you will sell the stock, remaining with a newly opened short position, at the peak price levels and with a volume much larger than you would be able to open at that price level. Your position begins to bring profits, supported by a decline in the share price, to which you contributed by selling your shares. So, thanks to this, you actually reduce your costs and risks to a minimum. The right moment to sell the shares and close the short position remains an open issue. Many years ago, I used the above strategy myself and I admit that with good results. Unfortunately, we can only recognize the strategy chosen by Qube after the fact and a couple days or weeks. Although in my opinion if the ITV share price will significantly exceeds the opening level of the short position, it should be assumed that it is a full or partial security for their purchases of ITV shares.
At the moment in my opinion is a big chance that this short position is the hedging position, although my assessment may not be correct because it is distorted by the package of ITV shares I own.