Selling 1 share allows to shave millions of dollars If you keep watching the order book daily you will see first hand how some can manipulate and shave millions of dollars off of the market capitalization of the whole company by selling as low as one single share. Yes you heard that right shaving 1 cent by selling 1 share at a discount allows you to magically change the valuation of the whole company by 2 million dollars for every cent. Talk about high impact manipulation.
| Recent Trades - Last 10 of 498 | More trades... |
| 11:19:15 | O | 1.13 | -0.06 | 100 | 2 RBC | 1 Anonymous | K |
| 11:18:51 | O | 1.13 | -0.06 | 100 | 2 RBC | 1 Anonymous | K |
| 11:18:06 | O | 1.13 | -0.06 | 100 | 2 RBC | 1 Anonymous | K |
| 11:17:01 | O | 1.13 | -0.06 | 100 | 2 RBC | 1 Anonymous | K |
| 11:17:01 | T | 1.13 | -0.06 | 100 | 7 TD Sec | 53 Morgan Stanley | K |
| 11:16:30 | T | 1.13 | -0.06 | 700 | 7 TD Sec | 53 Morgan Stanley | K |
| 11:16:30 | T | 1.13 | -0.06 | 7 | 7 TD Sec | 53 Morgan Stanley | |
| 11:16:06 | T | 1.13 | -0.06 | 100 | 7 TD Sec | 53 Morgan Stanley | K |
| 11:16:04 | M | 1.14 | -0.05 | 6 | 80 National Bank | 80 National Bank | |
| 11:15:32 | M | 1.14 | -0.05 | 5 | 14 Virtu ITG | 14 Virtu ITG |
Short sellers trying to trigger stop loss orders.
| Recent Trades - Last 10 of 39 | More trades... |
| 09:40:36 | D | 1.255 | -0.015 | 1,500 | 39 Merrill Lynch | 1 Anonymous | K |
| 09:40:35 | D | 1.26 | -0.01 | 1 | 14 Virtu ITG | 14 Virtu ITG | E |
| 09:40:35 | D | 1.26 | -0.01 | 2 | 14 Virtu ITG | 14 Virtu ITG | E |
| 09:40:35 | D | 1.26 | -0.01 | 85 | 14 Virtu ITG | 14 Virtu ITG | E |
| 09:40:35 | D | 1.26 | -0.01 | 2 | 14 Virtu ITG | 14 Virtu ITG | E |
| 09:40:35 | D | 1.26 | -0.01 | 7 | 80 National Bank | 80 National Bank | E |
| 09:40:35 | D | 1.26 | -0.01 | 3 | 80 National Bank | 80 National Bank | E |
| 09:40:35 | D | 1.26 | -0.01 | 1 | 80 National Bank | 80 National Bank | E |
| 09:40:35 | X | 1.26 | -0.01 | 2,000 | 79 CIBC | 1 Anonymous | K |
| 09:36:41 | U | 1.26 | -0.01 | 100 | 2 RBC | 2 RBC | K |
99% of Canadians do not know this and that is why some rogue American funds are abusing Canadians. This stock is traded in eleven different exchanges and short sellers are abusing the situation to muddy the waters and hide behind all the exchanges and between borders.
The stock is traded in ELEVEN different exchanges :
TSX_OMEGA_PURE_Chi-X_CX2_CXD_TriAct_Lynx & over the counter in the US as CJREF
There are about 8 million shares sold short on the TSX, about 2 million shares in the US and at least 10 million shares in all the other 9 exchanges combined. When you consider that most of the short selling is done through options and other derivatives (futures, contracts for difference..) 20 million is a conservative estimate given that short sellers try to fly under the radar and some brokers might not mark the trades correctly. Some studies have said that up to 80% of all trades are just wash trades meant to mislead and deceive shareholders into making a bad move. Short sellers are not your friends. They want your money.
Watch out for the stop loss hunting trap:
You will avoid the shake out trap if you understand the mechanics behind short selling. Hedge funds walk away with billions every year from hard working Canadians trying to prepare for their retirement. They place orders as little as 1 share at decreasing prices until the price drops significantly enough to trigger stop loss orders that some unsuspecting retail investors automatically place to protect their downside. Example: I place 15 sell orders at strategic times (when liquidity is very low, at the beginning or end of the trading session)
1- sell 50 shares at 1.77
2- sell 50 shares at 1.75
3- sell 50 shares at 1.74
4- sell 50 shares at 1.72
5- sell 50 shares at 1.71
6-sell 50 shares at 1.80
7-sell 10 shares at 1.68
8-sell 50 shares at 1.67
9-sell 50 shares at 1.65
10-sell 50 shares at 1.62
11-sell 50 shares at 1.61
12-sell 1 share at 1.60
13-sell 5 shares at 1.66
14-sell 50 shares at 1.65
15-sell 12 shares at 1.60
By sacrificing a few shares at a discount hedge funds can trigger the sale of thousands if not millions of dormant shares owned by naive retail investors who placed stop loss orders on them and that brokers and short sellers are happy to scoop up to cover their shorts and hoard them for when the stock starts rising up again.
Short sellers use derivatves like put options and futures to manipulate the underlying stock all under the radar.
Imagine that I assume that there are enough shareholders that will be easily shaken out if the price is low enough for an extended period.
Let us call my hand a “strong invisible hand ” and those I am planning to push out weak hands.
Let us assume this one strong invisible hand will take on 20,000 weak hands(weak because of lack of resources, information, experience...). As a strong hand my favourite game is shorting stocks both directly (2 to 5%) and indirectly using put options 95 to 98%) and I have been been playing it for decades squeezing and crushing the weak hands. The game goes like this:
- I dump a large order of 50 million shares for $6 a share
- A few months later I sell short another 30 million shares for $5 a share
- A few months later I sell short 10,000,000 shares for $4 a share
- A few months later I sell short 5,000,000 shares for $3 a share
- A few months later I sell short 3,000,000 shares for $2 a share
- A few months later I sell short 2,000,000 shares for $1 a share
- At the end of this special operation (bear raid) spanning many years my strong hand would have sold short 100 million shares for $513, 000,000 ($5.13 per share on average) bought by some 20,000 retail investors who are now faced with two options :
1- Surrender to my shakeout and sell for $1 and realize their paper loss.
2- Realize I am a financial bully fishing for liquidity and hold the line against my wish until I get squeezed for thinking I could squeeze 20,000 hands.