Member Info for Stupmy

It's a very thin market so selling was not that easy. I've dropped 20% of my holding. Hoping for the price to come back to 53 or lower.

Almost hit 67 and if that article is anything to go by, then we may take out the May highs in the near future.

Certainly perked up a bit today. Very welcome.

SG, make it your thing! You've got something important with your fundamental approach, add the extra layer. Look at that chart, the pattern (currently) is very clear. It can change and turn you over in a second, but if you have the conviction of the fundamental approach, then the 'other side' can add a fair bit of value.

Look at the chart SG, the pattern is very, very clear.

DTH, these swaps are time limited from what I can gather, do you have a time frame on this?

KD, I rarely underestimate that!! I've seen that stupidity in action on numerous occasions. Ashamed to say so, but I've occasionally been involved. Much less frequently nowadays thank goodness. Thanks for your answers. I've learned something.

I did see it was time limited and my little bit of research suggested that the time limit is often 1 year. Is that what it is in this case?

I'm still struggling JCL, but feel as though I'm close to epipheny.

KD, so with no underlying asset being bought and one party betting long, the other equal short (neutral) why did the SP respond so positively? It still looks to be a neutral event.

Also, can we tell which side of the arrangement JPM are and who's at the other end?

JohnyCL, I don't either, I find this side of things very 'dry' and difficult to understand. In this case though, I suspect it would be best to get some sort of a grip on what is actually happening. I was wondering also whether JPM was likely the short or long counterparty. I had them down as more likely short (but bearing in mind I don't understand it, that's just bias). JPM could be the investor, ie. long.

Thanks KD, so is it overall neutral (with equal long/short counterparties) and if it is, then why has it lit a fire under the WG SP? If I'm understanding it one party thinks it'll fall in price the other that it will rise in price and neither party are buying shares?

Thanks DTH. I found some of that, but didn't really understand it. Thanks for the explanation, I suspect it's one of those things that'll take a while to infuse itself into my rather tiny, lightweight brain.

What I found though was that one party e.g. a long investor receives payments equal to the increase in value of the underlying asset (WG share here) plus any dividends, the other party (short; usually a bank or dealer) receives money equal to a financing fee (often based on libor plus a spread) and any decrease in value of the shares.

I do struggle to see it clearly, but it seems to be an agreement between counterparties; one long, one short. As such I'm struggling to see why the SP would rise so fast? It seems overall neutral in sentiment?

Those are cash settled equity swaps. We need someone with specialist knowledge to explain it. But they're not shares and as far as I know don't represent buying of the underlying shares.

Not sure what's going on, but I slipped in a cheeky buy in case we're off to the races.

I see a risk of it drifting down to 518 or lower. Possibly not in the coming week though.

Strange price action this morning. SP dropped to 608 on open and is now at 638.5 on v low volume. Weird.

Spread is terrible. I've decided not to add for the moment. See what happens next week.

They were forced to hold the bonds as collateral. The way I recall (happy to be corrected), as the Fed raised interest rates the bond values decreased leading to the mark to market discrepency. Then a run on the bank meant the bank had to close out the bonds (originally intended to be held to term) at a big loss to pay those wanting to move their deposited money. I'm not even sure that it was totally their fault, but I guess there must have been mismanagement of risk.

Sheltie, the rise was on very low volume, the fall back has been higher volume. My guess is that PI interest drove the rise and profit taking and/or shorts pushed it back down. With such a large rise on low volume, there must have been very little on the sell side at that point so maybe a smart player pushed the price up to catch some volume from the break up, then sold into it to take profit. We need to see where it settles now, but it's very possible that 220 or thereabouts will now act as support. I'm annoyed with myself for not dropping a % at or near 234.