HSX Forum

Playing & Trading Strategy

Reply Topic List All Forums

One of these things is not like the other..... (and I wish I knew why...)

Posted by: The Digital Mariner (a.k.a SWCherry) on Jul 10, 07:29

Names anonymized to attempt to ignore which bonds are being discussed in an attempt to not end up scribbled for discussing stock movements. It is not even about these bonds, it’s more about trying to understand what makes one stock go wild while other similar stocks in similar situations don’t. Any numbers used, general as they are, are also at least an hour old. So the facts are old but are still the facts and they don’t add up.

Starbond AAAAA adjusted for a blockbuster yesterday up to the mid-70s and as of this writing it trading down over $11 already today on a volume a little over a million. Bond AAAAA has a total amount owned (long and short – 2/3 long) around 22M shares.

Starbond BBBBB adjusted for the same blockbuster also up to the mid-70s and as of this writing is trading down $1.xx already today on about half the volume of bond AAAAA. Bond BBBBB has a total amount owned (long and short – 90% long) around 21.5M shares.

The only major difference I see between AAAAA and BBBBB is that AAAAA has an adjust scheduled in about 6 months that is projected (using current pricing) to lose about 10% of the TAG. BBBBB’s next adjust doesn’t have a release date but the most likely candidate for release would cause an adjust that would stay flat to the current TAG. Maybe the lack of adjust is causing BBBBB holders to dump instead of flip (accounting for the disparity of trading volume)? So let’s look for a bond with a pending adjust.

Starbond CCCCC adjusted yesterday up to the around $100 for a film at that delisted at about a third of the price of AAAAA’s film (a hit but not blockbuster). As of this writing it is trading down pennies on a volume almost identical to AAAAA’s volume. Bond CCCCC has a total amount owned (long and short – 60% long) around $28M shares.

Bond CCCCC’s next adjust is within the next month and is projected to lose about 30% of their TAG.

So to recap:

AAAAA and BBBBB both adjusted UP for the same movie to similar TAGs and similar total outstanding shares of the bond. AAAAA has twice the trading volume already today that is possibly due to traders reversing positions instead of simply dumping the bond because AAAAA has an impending projected downward adjust in the next 6 months and BBBBB has no upcoming movies with a release date scheduled (and the likely candidate for the next film would have a negligible adjust). Yet AAAAA is down 15% and BBBBB is down less than 2%.

AAAAA and CCCCC have similar trading volume on the morning after adjusting UP for different films and a similar amount of outstanding shares. Both bonds have upcoming adjusts projected within the next 6 months that project downward adjusts: CCCCC is projected to adjust more significantly (30% of $100 vs 10% of $70) and sooner (1 month vs. 6 months) than. But for some reason AAAAA has dropped almost 15% and CCCCC has remained almost steady.

Traders seem to be treating these bonds similarly, yet one has a massively large movement significantly disproportionate to the others. Is there an explanation for such a wild variation that I am not seeing? Why isn’t CCCCC down 15% or 10% or even 1%? Why is BBBBB at half volume down only 10% of what AAAAA is? It just doesn't make any sense.

Thanks in advance!

One of these things is not like the other..... (and I wish I knew why...) The Digital Mariner Jul 10, 07:29

I agree...and BONDS did not get on the elevator for AAAAA but even stranger is Buy BONDS 20 Jul 10, 08:34

and in the time it took me to type that up, it dropped another $2 on ~200k flips from long to short. Breaks? What breaks? {nm} The Digital Mariner Jul 10, 12:06

'brakes' not 'breaks' {nm} RazorHawk Jul 10, 13:58

There is no way for you know 100% what volume and direction all those shares were. {nm} Antibody Jul 10, 14:05

That was meant for "The Digital Mariner on Jul 10, 12:06" {nm} Antibody Jul 10, 14:05

At this point, that is true. But YOU do and could easily shed some light on the situation without fully divuldging the secret sauce. The Digital Mariner Jul 10, 19:02

I can not explain the behavior of every trader on why he/she made the trade he/she made. {nm} Antibody Jul 11, 10:40

Because the intention of every trader is the question being asked.... The Digital Mariner Jul 11, 13:03

Again, you do not know what each and every transaction going through. You are only ASSUMING that you know. Antibody Jul 11, 13:42

Again, I never claimed to know each and every transaction or assume that I know. But YOU do The Digital Mariner Jul 11, 17:52