The Short Report – 24 Sep 2020

Weekly Reports | Sep 24 2020

See Guide further below (for readers with full access).

Summary:

Week ending September 17, 2020

Last week The ASX200 attempted a bounce-back from its Nasdaq-driven pullback but failed by week’s end. Another leg down ensued.

As is evident on the table below, shorters remain mostly inactive, with no bracket changers at all until we get into 7% and below.

The only move of one percentage point or more is that of Nearmap ((NEA)), which fell to 5.8% from 6.8% shorted as shorters took up the company’s capital raising.

We might note Webjet ((WEB)) shorts are becoming ever more crowded, moving last week to 17.5% from 16.8%.

In the battle of the travel agents, Corporate Travel Management ((CTD)) rose to 7.3% from 6.5%, while Flight Centre ((FLT)) fell to 5.8% from 6.7%.

We also welcome back Cooper Energy ((COE)) to the bottom of the table, where it had previously spent some time, and welcome fish farmer Tassal Group ((TGR)), which I don’t recall being on the table any time in the recent past.

While this report highlights only short positions in ordinary shares, for the sake of interest I’ll note an ETF has appeared from nowhere to be 20.2% shorted. It’s the Ultra Short Nasdaq 100 Hedge Fund (SNAS).

The Nasdaq 100 is a top 100 version of the Nasdaq Composite, which is very heavily weighted to the FANG & Co tech mega-caps – more so than the wider Composite index. As it is a “short” EFT, investors win when the Nasdaq 100 falls, and given it is “ultra-short” it is leveraged, meaning every 1% move in the index should result in a 2% to 2.75% move in the ETF in the opposite direction, according to the sponsor.

The sponsor warns, in no uncertain terms, FOR HIGHLY EXPERIENCED INVESTORS AND FOR SHORT TERM TRADING ONLY.

And just to further complicate matters, 20.2% of this short-side ETF has been shorted, making the position a short short, or upside bet.

My guess is this would be one bold hedge fund backing a bottom in the Nasdaq’s correction.

No luck so far.

No Movers & Shakers this week.

Weekly short positions as a percentage of market cap:

10%+
WEB   17.5
MYR   11.1


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