SHLDQ - Sears Holdings Corp

[tombgrt]

Short squeeze feeding on itself it seems. Good to see it work out but when to sell those leaps will always be a question mark. :x

[constructive]

1. Who naked sold short the shares? Since it is illegal, who did that? Which broker facilitated this?

I can't believe it is some retail investors who naked shorted the shares from some discount brokers. It must be some premium brokers who helped the big hedge funds to do this.

 

Are you making the assumption that long term holders aren't lending their shares out? Considering they can get a good return lending shares, I don't think that's a good assumption.

 

2. Is short positions not required to disclose in SEC filings? I haven't seen any. Assuming it is some unsophisticated long/short equity funds, maybe long Amazon/short Sears? Will they get margin calls for naked shorted positions?

 

No, short positions are not required to be disclosed. And it's a pretty bad idea to assume the people on the other side of your trade are unsophisticated.

[merkhet]

Any news? Or the famous short squeeze?

 

I was gonna ask the same question.

The other questions that I am curious about are:

1. Who naked sold short the shares? Since it is illegal, who did that? Which broker facilitated this?

I can't believe it is some retail investors who naked shorted the shares from some discount brokers. It must be some premium brokers who helped the big hedge funds to do this.

2. Is short positions not required to disclose in SEC filings? I haven't seen any. Assuming it is some unsophisticated long/short equity funds, maybe long Amazon/short Sears? Will they get margin calls for naked shorted positions?

 

I'm not aware of any news here.

 

(1) I don't think you have to have naked shorts to have the short position you have here. Person B borrows shares from Person A. Then Person B sells to Person C. Person D then borrows the shares from Person C.

 

(2) Short positions are not required to be disclosed in SEC filings.

[muscleman]

1. Who naked sold short the shares? Since it is illegal, who did that? Which broker facilitated this?

I can't believe it is some retail investors who naked shorted the shares from some discount brokers. It must be some premium brokers who helped the big hedge funds to do this.

 

Are you making the assumption that long term holders aren't lending their shares out? Considering they can get a good return lending shares, I don't think that's a good assumption.

 

2. Is short positions not required to disclose in SEC filings? I haven't seen any. Assuming it is some unsophisticated long/short equity funds, maybe long Amazon/short Sears? Will they get margin calls for naked shorted positions?

 

No, short positions are not required to be disclosed. And it's a pretty bad idea to assume the people on the other side of your trade are unsophisticated.

 

That is true, which is why I am concerned.

I don't know if long term holders are lending shares out, or it is naked short. Is there a way to find out?

[muscleman]

Any news? Or the famous short squeeze?

 

I was gonna ask the same question.

The other questions that I am curious about are:

1. Who naked sold short the shares? Since it is illegal, who did that? Which broker facilitated this?

I can't believe it is some retail investors who naked shorted the shares from some discount brokers. It must be some premium brokers who helped the big hedge funds to do this.

2. Is short positions not required to disclose in SEC filings? I haven't seen any. Assuming it is some unsophisticated long/short equity funds, maybe long Amazon/short Sears? Will they get margin calls for naked shorted positions?

 

I'm not aware of any news here.

 

(1) I don't think you have to have naked shorts to have the short position you have here. Person B borrows shares from Person A. Then Person B sells to Person C. Person D then borrows the shares from Person C.

 

(2) Short positions are not required to be disclosed in SEC filings.

 

I heard that any share that is already lent out for short selling will be marked as lent out, and any buyer of this share could not further lend out the share.

[merkhet]

If it was a naked short, it would likely pop up on the following list:

 

http://www.nasdaqtrader.com/trader.aspx?id=regshothreshold

 

There are at least two possibilities right now:

 

(1) This is a self-feeding slow motion squeeze

 

(2) There is renewed interest in people owning Sears, and there's very little liquidity in the shares so that it's pushing up the stock price.

 

The next publication of short interest will be September 11th, which will show the short interest as of August 30th, 2013.  We'll have to wait until September 24th to see the September 13th, 2013 short interest to see whether a mini-squeeze of sorts is responsible for recent events.

[CorpRaider]

Eddie and Bruce et. al. could break you mates, in two pieces over their knees.  You know it and they know it.  They could buy you shorts 6 times over.  They could dump, er tender, the stock just to burn your arse!  Sorry, couldn't resist with all this discussion of the float, controlling blocks, squeezes and strategery.

[texual]

I'm hoping this is a temporary pop from some spark and it dies down fast. I want to get shares in the low 40's.

 

Patiently waiting for the stock to get back down there.

[zippy1]

The annualized rate of return for selling put actually is quite good also.

[bargainman]

The annualized rate of return for selling put actually is quite good also.

 

I mentioned this in my analysis here:

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/shld-scenarios-and-actions/

[tombgrt]

I'm hoping this is a temporary pop from some spark and it dies down fast. I want to get shares in the low 40's.

 

Patiently waiting for the stock to get back down there.

 

What has changed in the last week that you want to buy more now but not last week?

[warrior]

Spoke with securities lending  department , here is some  info on SHLD.

Lendable shares 6.87(mil)

Utilization 98.81%( shares borrowed)

Available 0.08 (mil)

Lending rate today 935 bp

7 days 1475 bp

IMO Lending rate is extremely high and almost no shares available .

cheers!

 

[muscleman]

Spoke with securities lending  department , here is some  info on SHLD.

Lendable shares 6.87(mil)

Utilization 98.81%( shares borrowed)

Available 0.08 (mil)

Lending rate today 935 bp

7 days 1475 bp

IMO Lending rate is extremely high and almost no shares available .

cheers!

 

This is confusing.

Lendable shares 6.87(mil)

Available 0.08 (mil)????

What is the difference between the two?

[warrior]

muscleman,

6.87mil  those  who long SHLD and  were willing to lend .

  Out of this pool of 6.87 mil , As of today, about 80k-60k shares only available to be lend, for those who wants to borrow and short SHLD. That is why lending rates is so high.

 

[gr33ngi4nt]

Assuming you believe in the story, why wouldn't someone buy enough stock to be able to lend out the shares (assuming you can get borrow), use part of the proceeds to offset the purchase of puts to hedge that position in case the stock tanks, and then just sit and wait?

[heth247]

muscleman,

6.87mil  those  who long SHLD and  were willing to lend .

  Out of this pool of 6.87 mil , As of today, about 80k-60k shares only available to be lend, for those who wants to borrow and short SHLD. That is why lending rates is so high.

 

If only 6.87M is available to borrow, how can SHLD has a short interest of 15M shares?

 

Or, does it mean that this 6.87M number can change anytime, e,g. increasing or decreasing when the lenders change their mind?

[muscleman]

muscleman,

6.87mil  those  who long SHLD and  were willing to lend .

  Out of this pool of 6.87 mil , As of today, about 80k-60k shares only available to be lend, for those who wants to borrow and short SHLD. That is why lending rates is so high.

 

 

Sorry I still don't understand.

So you are saying that 6.87 million shares are longs who are willing to lend. But only 80k shares are available to be lent? How can longs be willing to lend, but the shares are not available to be lent? Do you mean most of these shares that were willing to be lent have already be borrowed and sold short? If this is true, then 6.87 should mean total short interest, but the total short interest is 15 million, right?

[warrior]

15 mil  I assume  from the  Nasdaq , where if im not mistaken  they register  all short orders, averaging and reporting every 2 weeks ,reflecting all  short interest. 

The data  that Im referring  to is from securities  lending  desk ,and  the system they use feeds daily  .almost all  major players in North America feed/use  the same system ,the system they use is  -transaction explorer  .

And yes, can decrease or increase on daily basis.

Disclosure: no position in SHLD

 

[LC]

15 mil  I assume  from the  Nasdaq , where if im not mistaken  they register  all short orders, averaging and reporting every 2 weeks ,reflecting all  short interest. 

The data  that Im referring  to is from securities  lending  desk ,and  the system they use feeds daily  .almost all  major players in North America feed/use  the same system ,the system they use is  -transaction explorer  .

And yes, can decrease or increase on daily basis.

Disclosure: no position in SHLD

So if the current short interest is 6.8m, the recent increase in price is due to shorts covering...?

[warrior]

To clarify my thoughts:

I’m not referring to the total short been registered or short squeeze/covering …

 

what I do care and have been trying to refer to is that .

 

If I  decide to go long SHLD, I may also decide to lent my shares to generate extra income for the portfolio, and at the present monthly average  lending rate  net  that  I would generate about 700bp( varies daily ),  it is high and attractive.

therefore, I do want to know what is lendable and what is utilization  rate or what is supply and demand at the Securities lending desk and most importantly what is the lending rate to lend securities.

Lenders they do not use total short interest from Nasdaq ..., some of them even do not know .

 

I'm sure, some of the board members remember in the "old Fairfax days”.

when "shorts/sharks" attacked us . in fact, I know that some of the board members were lending Fairfax shares ,generating extra income, and buying more calls ...

Truly ,that was wonderful time .

 

 

 

[muscleman]

To clarify my thoughts:

I’m not referring to the total short been registered or short squeeze/covering …

 

what I do care and have been trying to refer to is that .

 

If I  decide to go long SHLD, I may also decide to lent my shares to generate extra income for the portfolio, and at the present monthly average  lending rate  net  that  I would generate about 700bp( varies daily ),  it is high and attractive.

therefore, I do want to know what is lendable and what is utilization  rate or what is supply and demand at the Securities lending desk and most importantly what is the lending rate to lend securities.

Lenders they do not use total short interest from Nasdaq ..., some of them even do not know .

 

I'm sure, some of the board members remember in the "old Fairfax days”.

when "shorts/sharks" attacked us . in fact, I know that some of the board members were lending Fairfax shares ,generating extra income, and buying more calls ...

Truly ,that was wonderful time .

 

I see. The securities lending desk is your broker's own department, right? I thought it was some centralized department regulated by SEC.

I did consider to lend the shares. I am using Fidelity and it is not possible to do this.

I know IB is nice, but filing tax is a pain. ::)

[warrior]

To clarify my thoughts:

Im not referring to the total short been registered or short squeeze/covering

 

what I do care and have been trying to refer to is that .

 

If I  decide to go long SHLD, I may also decide to lent my shares to generate extra income for the portfolio, and at the present monthly average  lending rate  net  that  I would generate about 700bp( varies daily ),  it is high and attractive.

therefore, I do want to know what is lendable and what is utilization  rate or what is supply and demand at the Securities lending desk and most importantly what is the lending rate to lend securities.

Lenders they do not use total short interest from Nasdaq ..., some of them even do not know .

 

I'm sure, some of the board members remember in the "old Fairfax days.

when "shorts/sharks" attacked us . in fact, I know that some of the board members were lending Fairfax shares ,generating extra income, and buying more calls ...

Truly ,that was wonderful time .

 

I see. The securities lending desk is your broker's own department, right? I thought it was some centralized department regulated by SEC.

I did consider to lend the shares. I am using Fidelity and it is not possible to do this.

I know IB is nice, but filing tax is a pain. ::)

[warrior]

We have an agreement signed with securities lending desk, directly  , where we would provide them with our  inventory, usually agreement  would be be 50% /50% on the lending rate , it is negotiable , depends on the business you give them.

For retail investors, I would assume it would be with prime broker. Where their own securities lending desk provide with list of inventories they have

 

[cubsfan]

We have an agreement signed with securities lending desk, directly  , where we would provide them with our  inventory, usually agreement  would be be 50% /50% on the lending rate , it is negotiable , depends on the business you give them.

For retail investors, I would assume it would be with prime broker. Where their own securities lending desk provide with list of inventories they have

 

When my SHLD shares at Schwab are lent out, I get 4% (this last time anyway). That is in my 401K account.

I'm assuming I get far less than your arrangement, but I'll take what I can get.

[compoundinglife]

We have an agreement signed with securities lending desk, directly  , where we would provide them with our  inventory, usually agreement  would be be 50% /50% on the lending rate , it is negotiable , depends on the business you give them.

For retail investors, I would assume it would be with prime broker. Where their own securities lending desk provide with list of inventories they have

 

When my SHLD shares at Schwab are lent out, I get 4% (this last time anyway). That is in my 401K account.

I'm assuming I get far less than your arrangement, but I'll take what I can get.

 

I have SHLD in a lending account with Schwab as well. I was getting 2% until August 19th when they bumped it up to %4.