Member Info for knot

The index review : "All changes from this review will be implemented at the close of business on Friday, 20 December 2024 and take effect from the start of trading on Monday, 23 December 2024."

From a price perspective the settlement date (closing price) was based on the end of trading day for 3rd December. Trackers (in thoery) should take the settlement date as that is the calculated effective change date (point in time the index entry/exit is irreversible, regardles of subsequent share price move). There is a gap/delay between 3rd and 23rd, even though a share may be in/out of the index, make of it what you will in relation to the gap and what may or may not happen in that gap.....

The index changes are calculated on one day (close of 3rd) and then delayed by 3 weeks to when they are "implemented" on the (23rd).

Prior to the 23rd the Supreme Court "should" make an annoucement in relation to the appeal panel deciding if the appeal is to proceed. This is based on the 28th Nov being the filing date (Politico) and 14 days allowance for notice of objections to be filed. That "should" depends on the backlog and urgency attached to the case.....

"Index Rebalance Market Capitalisation data cut-off 1"

"3 December 2024"

https://www.lseg.com/content/dam/ftse-russell/en_us/documents/policy-documents/ftse-faq-document-uk-2024.pdf

Today is the first day that CBG is out of the FTSE250 index, so the forced selling of volumes from index trackers is no longer causing a drang on the share price. The new game may well be to push CBG back into the FTSE250 index and get the index trackers to buyback in and help the momentum in the same way as they may have done on the way down. What will be more telling is what happens to the short volumes reported at tommorrows end of trading day (represent the first post index days position changes) and then on end of Tuesdays trading day (end of prior week and new week strategy). The reason is that they had been selling into the pre-index exit by around 0.1% per day and they could have closed out with tracker volumes or are taking a high risk position that the Supreme Court is going to agree with a Court of Appeal ruling that is making the UK uninvestable, a global laughing stock and a borderline (or full) socialist state.

Proffit taking from day traders may be causing the end of day fade.

I would argue that the lack of a dividend in the near term is actually more of a benefit for a long term holder. The tax liability on dividends is far higher than capital gains and you get to choose when your capital gains becomes payable. In one regard I would argue that CBG should not reinstate the dividend early and instead reinvest far more for growth as the market may have an opportunity to consolidate after all this. I'm more than happy holding a disproportional allocation to CBG for the long term.

I always remember Buffets farmer analogy in regards to the market, just that the odd occasion the farmer panics and wants to sell his farm at a massive discount because of a passing cloud.

The market always changes and "never" prices anything correctly, only transitioning monentarily through the actual true price (if their is a deffinition as to true), which in itself is always changing. It's all perception, smoke, mirrors and who shouts loudest at times.

It's not really a gamble as such. When you actually look into the court case (read all the relevant cases and watch the 10 hours of the case) the real issue boils down to the fiduciary role is deemed to be paid (engagement fee) for within the car sale price. The problems with that proposition is (1) it is effectively "secret" (2) discriminates cash buyers (3) breaks the boundary between roles (4) completely undocumented (5) nobody knew at the time - including the FCA.

The wording in the ruling also ironically states "offer" of finance to the client, i.e. the broker has no special powers that are part of what a fiduciary role is defined as (the power to act on behalf of the client). To "offer" confers no powers. So, the engagement fee and the bounds of responsibility of the broker are distorted by the selective use of wordings in Wood and Hurstanger. Hopefully the Supreme Court will reflect on this and make the appropriate determination when they are not busy (as in the CoA case) writing copious notes mid trial and actually listening in detail to what council is actually saying.

The flip side is what happened with PPI and Plevin, where the Supreme Court ended up with a differing approach that provided different outcome. Perhapse the SC may also time bar a lot of the cases because maybe the FCA are allowing cases further back than legislation allows (FCA over stepping underlying legislation). The problem going back so far is the crossing of legal document retention timelines - which is part of why the time bar exists.

So, now we have 3.74% short interest, which is holding the price around 200-220 ballpark (FTSE250 settlement day today - CBG exit). How is this short interest going to close out without the share price running up, up and away, without the lack of "new" news, which is not already known.

The shorts have been adding between 0.1% and 0.2% per day on average over the last week to hold the price down, however the Supreme Court application is in and now awaiting the initial hearing. For the shorts, after today, the risk reward for a long naked short is changing and becoming weighted on the Supreme Court.

So, basic question is how do the shorts exit 3.74% without causing a massive run up, if the short was not against FTSE250 exit index volumes... Which settles out at the close of today (FTSE250 index)...

"History suggests some will choose to take their chances in light of the alleged issues." - based on what history ?

Remmeber that the 3rd is the FTSE250 index settlement and the shorts are "possibly" playing the strategy of early push down, closing out intraday volumes using the forced index sellers in the day (and any nervous longs). The prior weeks attraction to 220 would possibly indicate that this may be close to the end of days settlelement if this is based on options associated with the 250 index rebalance / exit.

First half of the week may trade quite differently to the second half as a result of the index changes.

In thier disclaimer, these particular words are comparable to those that helped create the fiduciary interpretation by the Court of Appeal : "These deals are chosen by our editorial team" - i.e. they are acting on your behalf to pre-select your choice and thereby influencing your decision significantly. The engagement "fee" interpretation could be taken comparable to motor (hidden and implied) such that your time (aquired by the clickbait headline) is the value engaged in such arrangement and your resulting committment to read such an article is the fee payment. If the engagement starts off with a clearly incorrect headline then it is possibly even more problematic. Wonder if there are any legal claims companies reading this looking for new directions ?

"Some links in this article may be affiliate links. If you click on them we may earn a small commission." - disclosure, upfront consumer agreement, etc. etc. ?

"We do not write articles to promote products." - no, but, they maybe write articles to potentially destroy value, potentially cause confusion and potentially face untold liabilities and issues.

Hillariously at the base of thier web page :

"Affiliate links: If you take out a product This is Money may earn a commission."

Wow, fuc...ng wow...

Have messaged the editor poiting out the basic facts the headline is 100% wrong.

If the article is not changed, everyone should make a complaint citing a very clear case of potential market manipulation asside from very bad reporting :

https://www.ipso.co.uk/making-a-complaint/complaints-form/

Very bad reporting or outright purposeful manipulation using distorted reporting.

"Motor finance scandal to cost lenders £25bn"

https://www.thisismoney.co.uk/money/markets/article-14141449/Motor-finance-scandal-cost-lenders-25bn.html

Stating explicitly : "The burgeoning scandal in the motor finance industry could cost lenders at least £25billion, the Bank of England warned."

This is based on the November Bank of England Financial Stability Report

https://www.bankofengland.co.uk/financial-stability-report/2024/november-2024

The comments made in the article refer to the average normal historic misconduct payment levels for ALL the banking industry as a whole for ALL misconduct activities at a broad brush of £5bn a year for 5 years, which derives the £25bn. The figure is not the motor finance in isolation it is ALL issues for ALL banks.

This in one way effectively says that the Bank of England expect the redress for Motor to be under £25bn and nowhere near Moodys £30bn finger in the eair.

Very specifically the Bank even state "We did not attempt to make a point estimate on that particular issue" - SO WHY DOES THIS IS MONEY STATE IT IS MOTOR COSTS !!!! Very bad reporting and outright misinformation, one for the press complaints commission ?

Within the report the last sentence in the paragraph relative to motor "Equity prices for some potentially exposed banks declined following the Court of Appeal ruling, reflecting market perceptions that the potential for higher redress payments could weigh on future profitability." - nothing new.

Given the way that the share price is gravitating back to 220p, I would have a guess that there are a lot of options liquidating at that strike.. possibly Friday close or if it continues on Monday/Tuesday for the FTSE250 exit settlement. To me it looks like options are the heavy influence.

Monday or Tuesday could see either a capitulation and an exit, followed by a log bull run or an epic squeeze to stay in the 250 and a potential stagnation as the shorts possibly risk holding for the next quarter against a Supreme Court ruling risk that completely destroys them. The price is not going to sit around 220 for long, nor is it going to try running into the wall of buyers at 180-190. It only needs to hold this level until close of Tuesday and then there are no more forced sellers. Then I believe it will see a long steady bull run back into the 250 index with a possible rocket assist from the Supreme Court. Where else are the shorts going to get 3.5% from ?

That's why todays run up to 234p posed quite a risk to the push out the 250 strategy, especially if exiting your short position requires it closing off via an index tracker flushing out. This is what I believe is going on and seems quite out in the open.

What I mean buy significant buyer is a pension fund suddenly deciding to pickup 10% or a takeover approach. At the moment the uncertainty limits the new buyers to those with higher risk limits, which may well be heavily retail. Even then between very few people they may have collectively aquired several % of the stock, which does have an effect in the end. It's boils down to a game of time at that point.

If your a short player, with a share like CBG at the moment, where their will not be any significant new buyer volume entering, when you push the share down the index weighting decreases and forces some sell side volume. If you continue this process day on day each day you reduce the market cap, the size within the index and force indexed selling into the market. Once you have pushed the share price down so far, all that is left is the residual flush when the index is calculated and all trackers would then have a final liquidation. Each push down a short is just buying back the forced selling volume from the indexes. Once it's out of the index, if the share has been massively oversold, then the strategy is flipped and the next stage is to buy back up to get the share back into the index and the trackers are then progressively buying back into the share. It's a longer term effect in the market.

Possibly just shorts and market makers protecting the FTSE250 exit for the index 2nd rinse. Regulating the rate of change to protect the exit play... if it had been allowed to stay above 230 it poses a risk for Mon and Tue gains putting it back in the 250 safe zone...

With 3 trading days left to see CBG ejected out of the FTSE250 and the share only being around 30p outside the exit range, could the now 3.5% short volume (and index deweighting volumes) see a massive squeeze and epic game of chicken. There may well be huge volatility in the next few days as one or the other is flushed out.

My personally view is, it may be better for CBG to exit the 250 becasue it will almost guarantee a better climb afterwards and the subsequent game of pushing CBG back into the index to rinse the trackers again.

The interim short window poses an opportunity for an epic squeeze.

Consider the timing for one and the price level. The UBS target is reported as 250p and 260p depending on source (curious as to why different) and only a few days before the index settlement on the 3rd, which surprise, surprise the 250p level puts them just outside the exit band at approx £375m.

https://www.stockchallenge.co.uk/ftse.php

The timing and price level are in some ways glaringly obvious as to what this may be about.

The other aspect that is missing is the timing of the target and when it was originally derived, not published externally to suckers.