Member Info for knot

Share price volatility varies. I have been involved in different markets where you can or are part of the bid and offer stacks, so you can see what is going on with a different perspective and trade differently as well. Share price gaps off the back of news or events also varies, sometimes with very odd relative timing, like todays drop at the start of today off the back of the FCA treasury hearing and Martin Lewis ? Really ? Just enhances my perspective that there are a lot of people who have no idea and when a market is like that it is quite easy for someone with volume just to push the market wherever they want, regardless where the actual value is. Am I day trading ? No. Just a long holder with a reasonable position.

In part to me it does not matter where it closes with the interim "noise" of short term position activity. Did I sell out at the 260 peak ? No ? Why ? It's got a lot better risk return balance. After reading through all the relevant cases and watching the case I belive the Supreme Court will either overrule the Court of Appeal completely or curtail the bounds of the fiduciary aspect significantly. The Supreme Court has not taken the decision to hear the case if they thought they were going to side with the Court of Appeals "unarguable" position letter. Clear as day.

If the FCA and Court of Appeal were in charge of the roads:

Road X was given a speed limit of 70mph 20 years ago and as part of the safety monitoring a speed camera was setup to log and record the speed of every driver on the road over that time. A number of accidents happened (fault does not matter) and the decision was then made to reduce the speed on the road to 50mph and at the same time prosecute every driver in the preceeding 20 years that had done between 50mph and 70mph. Sound fair ?

One trading session when the annoucement was made for the US sale and I think the price spiked to over 80p on a massive short squeeze. Priced back down massively within day, roughly 50p ballpark close from memory. Peak for the shares was around 170p, look at the last 5 years with a candle stick plot and it should show up.

The initial run up in price was on the back of the equivalent of 0.4% of the share volume (approx 597k shares traded). That is the visible volumes that had been traded. The 2:04pm sale of 942k shares (spike down) was the trigger for the slide afterwards, however the context is that 0.6% of the traded volume brought the shares back less that what the initial run up did for the price. Think about it. 0.4% run the price up 35p and 0.6% sale only brought the price down 15p. The 23rd Dec FTSE250 date the changes are implemented may well be an overhang on positions around the exit that are crating other distortions. Look at the balance of sensitivity/depth the market makers are offering.

End of the dat it makes for an interesting perspective for the 4% short volume if the Supreme Court overules the Court of Appeals mistake of widening the creation of a fiduciary obligation beyond prior case law.

Remings me of Centrica, which was massively cash rich after the sale of the US arm, where the shares jumped up massively, only to be dragged almost all the way back back with derivative inertia and day traders cashing in. The shares ended up double the spike value later on, so small bit of cash now or a lot more later.

So the inevitability of the Supreme Court hearing..... Interesting that the shares jumped so much, which will make for an interesting end of close tommorrow disclosure of the short positions that were stopped out today. Reporting delayed by 1 trading day... Makes one wonder how the 4% is going to close out and at what level...

"But yes, Qube have more than doubled their position, just since November 13th - and it has moved against them ever since. " - If your delta hedging a bunch of options that may well be factored into the option valuation, plus I doubt that it is a naked speculative play due to the size of the increments and timing of those increments. For the short positions I do not see them as an issue as such because they are already factored into the current price. In order to close that 4% they need shares and who is selling if it is not a hedged/option type play that is already factored into the current price as well.. Spec play would be hoping that the Supreme Court rules in line with the CoA or denies the hearing (which virtually everyone is in favour of having a hearing for clarity if not sanity) and I think the risk reward is stacked against a spec short play at this price level, let alone adding to it at a lower price.

"This is being manipulated back up" - Yep, exactly what I was thinking was going to happen....

Given even the FCA think the ruling was not clear (because it goes against what they agreed the market could do) the Supreme Court will have to hear the case and provide very specific clarity if not overule a very problematic decision to invent a new means for a fiduciary role to exist.

The shorts I believe have an exit strategy tied to options related for FTSE250 index exit volumes. The incremental build of the positions looks like delta hedging volumes as they approach expiry.

Chid - this case is nothing to do with government "favoured" social handouts - listen to what Reeves said during the Mansion house speech. She knows that any PPI reopening and other social gratitudes will impact the government funding AND growth, which will almost guareantee they are out next election. Next, read the relevant cases and watch the CBG case (all 10hrs of it) and then make your mind up. I'd much rather hold CBG as Lloyds will have a much bigger loss if the ruling is not changed as the PPI handouts will be for the remaining 50% of commission that was not paid out last time and be far bigger (£50b plus). That will cause government funding to blow a big hole in the budget with higher interest rates.

In terms of the "may also be wider implications" I find the use "may" very disconcerting because the FCA either does not understand the CoA ruling or for some very strange reason does not think it applies.

If the Supreme Court does not change the new CoA created ability for a fiduciary role to be based on an implied "secret" non-agreed engagement fee, which crosses role boundaries, all of the FCA regulated activities that have non fully disclosed up front commission fees (e.g. Insurance) will have the compensation culture bandwagon rolling up to.

The CoA ruling if left unchanged will do so much damage to the UK it is stunning, the unintended consequences are vast.

To me it is bullish (if old news, dated 2nd Dec) because when looking at the use of the word "substantive" along with the other parts it is effectively asking for clarity, which denying an appeal would not do. The "may also be wider implications" is also asking for clarity because the CoA ruling "does" create much wider implications.

FCA : We have been looking for wrong doing since Jan 2024, which we were not primarily responsible for because we defined the rules that the market followed. We banned what we previously allowed and now want to break legal law on time barred matters to allow claims going back to when companies do not have a legal obligation to retain the documentation for them ? How the F... does that make any sense ?

I'm quite stunned at the letter as it makes the FCA sound like idiots.

"All your theories have no context to the current situation" - I guess as the saying goes, you can lead a horse to water but you can't make it drink.

The ballpark of 250p was around the market cap for CBG for automatic exit point for the FTSE250 index. That's one point where 250 and 200 matter. Derivatives and delta hedging could create a theta decay of say 1p per day relative to option expiry, depending on vol and the relative price to expiry.

It's more complex. The current pool of risk adverse investors had created a bias towards the sellers having the upper hand, until a point was reached that the risk adverse buyers may have re-enter as buyers. That point would appear to have been around 180. Equally for the shorts if they viewed 220 as appealing to increase the short compared to not increasing at 180, unless the short increments are because they are delta heding to option expiry, in which case the price level become a factor of the option type and level. I'm not sure if you understand derivative hedging strategies. 232 is looking like a "resistance" which is just typically option hedging related, to which chartists just like to look at lines and not think about derivatives.

The market is a jigsaw and nobody ever sees the whole picture. The winners just know and see the right pieces.

The difference where it closes is the overall balance, which may indicate an overhang of sellling still flowing through from the exit of the FTSE250 index before the implemented date of the 23rd. Plus, it may also show or potentially indicate what the short strategies are in relation to the 4%. The SC "should" as I have mentioned before, be indicating if the ruling is to proceed soon (Appeal panel hearing).

This is not a one trick pony share price mover.

QBE position in crease was on the 3rd Dec. Index exit day.

"position by 3:30pm on the trading day after the day the position was reached"

https://www.fca.org.uk/markets/short-selling/notification-disclosure-net-short-positions

"safe in the knowledge that the courts will not change their tune" - you obviously discard the Supreme Court regularly changing the lower courts decisions, just like the Court of Appeal changed the district court rulings (and point blank said "all" of the district judges were wrong).

In terms of QBE position increase, that may (reporting lag x days ?) be their position as at the close of the 3rd Dec, which was the date for the FTSE250 index review settlement pricing, so I would wait for the next change in the reported short positions given the increases over the last couple of trading days. If they have increased the short even with the share price picking up and it is a speculative short, the short risk becomes massively exposed to the Supreme Court case progress, otherwise if it is hedged against index exit volumes (Implemented date settle) and therefore balancing out sales yet to happen.

Next few days it may become a little more clear.

One to have a think about with the gap between index calculation (3rd) and the "implemented" date of the 23rd is in relation to share buybacks. The typical pattern with buybacks may be that when they are announced the shre price picks up, before the buyback starts and equally they may start to decline before the share buyback period finishes. The positioning tends to happen with the information event, rather than the actual timeline of the trading. With the index entry/exit events this is likely to be the same type of pattern, where the trigger date is the definitive point of entry/exit rather than the actual "implemented" date, which, seems/may/disclaimer/don't know, to be a curious delay of sorts considering trading settlement is currently 2 days. If I were to have a tin foil hat on I would say the delay is on purpose for alternative reasons. The attraction to around 215-220-225p may well be more to do with derivative positions and theta decay / delta hedging rather than any fundamental valuation and the 220p timing may be more to do with the "implemented" timeline.

The shorts may well be pre-selling out volumes they are expecting to aquire as they possibly sold massive out of the money puts at the time and are now facing those puts being (or have/are been) delived on.

Should the long volumes steadily accumulate a larger net position than what the shorts can tollerate (risk management / strategy / position limits) then that attraction to the 215-225 will then break as the hedging trades fail to hold the price down.

None of this is advice of any sort, rather my perspective (with a tin foil hat on) as to what I believe.

Main aspect to watch is the changes in short position volumes.