Playing & Trading Strategy

Price history chart (courtesy KaiGee)

Our fund’s growth continues at a consistent level. We are consistently adding around $3 a share each week and at the time of writing it is above $4 for this week. This despite a few missteps with the shorting of ‘He Named Me Malala’, which I had assumed to be a niche release because the stock page made no mention of it being semi-wide. Cheap lesson learned: always check on a movie’s rollout independently of HSX!

Some of our other investments are treading water at the moment, not least among them being ‘The Martian’. I have to say that I never fail to marvel at the lack of intellectual rigour shown by many of the ‘players’ on HSX. Here is a movie that has led the box office on all twelve days of its release and has already grossed $117 million, with every prospect of topping the box office for the rest of its run. Yet based on its current share price the HSX marketplace has determined that it will only take an additional $34 million in the next 16 days! I only wish I had sufficient funds to go back ‘all in’.

The above example is by no means the most egregious out there. Day after day you see people following the herd and piling into stocks that not only defy rationality but are plainly absurd. Movies that have been cancelled, that won't report or are unlikely even to see a proper theatrical release. Don’t even get me started on the fools that trade Star Bonds without a clue that they are based on a simple mathematical formula. It is a fact of life that the marketplace is a dog eat dog environment and it is true to say that there wouldn’t be such easy pickings for the rest of us if everyone was equally astute. Going beyond the harvesting of the ‘low-hanging fruit’ available as a consequence of the uninformed gameplay outlined above, there is a darker side of HSX that actively impacts on the vast majority of occasional players and plays fast and loose with the very ethos that HSX is based on.

Full disclosure: I am a day trader. I spend a significant  portion of my waking existence in front of screens looking at the movement of numbers, up, down and sideways - cross-referenced against their attendant graphs, in an attempt to arbitrage a narrow percentage gain. So having an HSX screen open all of the time is a simple adjunct to my day to day life. Whereas the FX, commodities and stock index futures are moved invisibly, HSX stock movements are incredibly transparent. Buying 100,000 shares moves the stock up. Selling or shorting moves it down, whilst doing both compounds the effect. I know people say there is a ‘special formula’ but in crude terms this is what happens. I know this because I am now one of the heaviest volume traders on the board and I see it happen day in day out. Where I take issue, particularly now that I am a fund manager, is the blatant manipulation of stock by a small number of traders. Through my main port I maintain a ‘radar array’ of a single share of all the eligible FOXX  fund stocks. The reason I keep them in my main port is because that is where I’m usually logged into, I only go into the Fox Fund account to make specific trades. Immediately after reset I have noticed that 600,000 shares are usually purchased of two, or sometimes more, of my Fox Fund stocks that haven’t been active previously. This translates as six people moving the stock into a prominent position on the ‘Top Price Movers’ Board. Initially, as a newbie fund manager, I found myself covering these stock movements and inadvertently compounding the movement. Sometimes this would lead to a further uptick as buyers formed a critical mass. Once in the top five movers a stock tends to lift off as other buyers come aboard. Most often though the stock would stall and the initial purchasers would sell off and leave the fund nursing a loss. Now I’m wise to this manipulation and refuse to play ball. Obviously I have no control over what others do but I can assure investors to this fund that we will have no truck with increasing the volatility of non-news related movements. A question to end on: Is it possible for the powers that be to analyse this suspicious activity?