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Biggest Hedge Fund Placing Massive Shorts On U K Bank


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http://www.telegraph.co.uk/journalists/jonathan-sibun/8265251/Hedge-fund-DE-Shaw-takes-100m-short-position-in-Barclays.html

Hedge fund DE Shaw takes £100m short position in Barclays
DE Shaw, one of the
world's biggest hedge funds
, has taken a near
£100m short
position in Barclays amid concern over the future health of the banking industry.
Its decision to bet on a falling share price at one of the UK's leading banks could dent confidence in the financial services sector. Investors are already worried about the effects of tougher regulations on funding costs and future profitability.
Hedge funds on both sides of the Atlantic made considerable gains by betting against banks' share prices during the financial crisis and DE Shaw's move will raise fears that some again sense an opportunity.

Might explain the rush to lighten the tills by the Banksters recently. They are probably in on the shorts--lighten the till and make a double killing shorting the stock. Shrewd move.

I have always believed the second leg of the crisis was due. Take cover, 2011 should be quite a tumultuous time for the markets. Commodity bubble bursting will add some spice to the recent doldrums.

Edited by Realistbear
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Chart http://bigcharts.marketwatch.com/charts/big.chart?symb=uk%3Abarc&compidx=aaaaa%3A0&ma=1&maval=200%2C50&uf=0&lf=1&lf2=2&lf3=0&type=2&size=2&state=8&sid=1056161&style=320&time=12&freq=2&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=5804&mocktick=1

There are 3 ways stocks go. Up, Down, Sideways/Range bound.

What is the next move? The Barclays shareprice is range bound between the 250p zone and the 400p zone, for the last year and a half. If it breaks low below 250p zone, go short, if it breaks above 400p zone, go long. Meantime, wait, unless you have inside information. Let us revist this thread in 1 month to see if DE Shaw were right.

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After Bob Diamond's self-satisfied performance and announcement to the Treasuly Select Committee that Barc wouldn't have needed a bailout anyway, I think the chances of Barc being rescued by either the BoE or the Government when they go t1ts is precisely zero.

Perhaps this is why the FSCS are flooding our media with adverts....................

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  • 7 months later...

Chart http://bigcharts.marketwatch.com/charts/big.chart?symb=uk%3Abarc&compidx=aaaaa%3A0&ma=1&maval=200%2C50&uf=0&lf=1&lf2=2&lf3=0&type=2&size=2&state=8&sid=1056161&style=320&time=12&freq=2&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=5804&mocktick=1

There are 3 ways stocks go. Up, Down, Sideways/Range bound.

What is the next move? The Barclays shareprice is range bound between the 250p zone and the 400p zone, for the last year and a half. If it breaks low below 250p zone, go short, if it breaks above 400p zone, go long. Meantime, wait, unless you have inside information. Let us revist this thread in 1 month to see if DE Shaw were right.

It took time but this is how the trade unfolded. The key was to wait until it broke down, not a week before, because there is a cost for holding a short position over time.

barc.jpg

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D.E. Shaw nearly blew up in 1998 betting on a "sure thing" Nothing to stop them doing it again...

Indeed, they very nearly went under following the same strategy (corporate vs. sovereign credit spread) as LTCM. Having said that, 100M is a pretty small chunk of their total assets now so, whilst they may well be wrong, it's unlikely to blow them up.

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Indeed, they very nearly went under following the same strategy (corporate vs. sovereign credit spread) as LTCM. Having said that, 100M is a pretty small chunk of their total assets now so, whilst they may well be wrong, it's unlikely to blow them up.

depends how leveraged they are.

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Indeed, they very nearly went under following the same strategy (corporate vs. sovereign credit spread) as LTCM. Having said that, 100M is a pretty small chunk of their total assets now so, whilst they may well be wrong, it's unlikely to blow them up.

Have you missed that the OP was from January, when the Barclays share price was 310p (post 2)? They weren't wrong, they were very right as at today.

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http://www.telegraph.co.uk/journalists/jonathan-sibun/8265251/Hedge-fund-DE-Shaw-takes-100m-short-position-in-Barclays.html

Hedge fund DE Shaw takes £100m short position in Barclays
DE Shaw, one of the
world's biggest hedge funds
, has taken a near
£100m short
position in Barclays amid concern over the future health of the banking industry.
Its decision to bet on a falling share price at one of the UK's leading banks could dent confidence in the financial services sector. Investors are already worried about the effects of tougher regulations on funding costs and future profitability.
Hedge funds on both sides of the Atlantic made considerable gains by betting against banks' share prices during the financial crisis and DE Shaw's move will raise fears that some again sense an opportunity.

Might explain the rush to lighten the tills by the Banksters recently. They are probably in on the shorts--lighten the till and make a double killing shorting the stock. Shrewd move.

I have always believed the second leg of the crisis was due. Take cover, 2011 should be quite a tumultuous time for the markets. Commodity bubble bursting will add some spice to the recent doldrums.

They are all just gamblers.

If they knew anything they would have laid their 100 million short a couple of months ago when Barc was nearer 300. They would have doubled their money by now!

Edit: Just noted the date of the original post.

Edited by nohpc
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They are all just gamblers.

If they knew anything they would have laid their 100 million short a couple of months ago when Barc was nearer 300. They would have doubled their money by now!

Edit: Just noted the date of the original post.

They were wrong just looked at the charts Barc went upto 250 is to 330,

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It took time but this is how the trade unfolded. The key was to wait until it broke down, not a week before, because there is a cost for holding a short position over time.

barc.jpg

there is nothing in those charts that screams majorly overbought or oversold........what gives?

I've even checked out MACD for this one,..and that's usually a very good indicator of price action.

...strange.

if anything it now looks like quite a good buy.

Edited by oracle
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Have you missed that the OP was from January, when the Barclays share price was 310p (post 2)? They weren't wrong, they were very right as at today.

Haha, missed that! My point stands though, a 100M position for a fund of that size would be unlikely to blow them up if it went wrong.

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depends how leveraged they are.

No it doesn't. Assuming the report to be accurate, the total size of the position was around 100M. Supposing it went against them and the share price doubled, their loss would be 100M, not life threatening to a fund of that size. Whether they took the position on by paying 100M cash collateral directly or by putting up 10M and borrowing the rest is neither here not there, the actual loss would be identical.

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No it doesn't. Assuming the report to be accurate, the total size of the position was around 100M. Supposing it went against them and the share price doubled, their loss would be 100M, not life threatening to a fund of that size. Whether they took the position on by paying 100M cash collateral directly or by putting up 10M and borrowing the rest is neither here not there, the actual loss would be identical.

well, no, if they lose on this bet and they are leveraged, they gotta pay up the loan.

so maybe they are in for 100m, and borrowed another billion.....who knows?

And maybe they will win...looks like they might.

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http://www.telegraph.co.uk/journalists/jonathan-sibun/8265251/Hedge-fund-DE-Shaw-takes-100m-short-position-in-Barclays.html

Hedge fund DE Shaw takes £100m short position in Barclays
DE Shaw, one of the
world's biggest hedge funds
, has taken a near
£100m short
position in Barclays amid concern over the future health of the banking industry.
Its decision to bet on a falling share price at one of the UK's leading banks could dent confidence in the financial services sector. Investors are already worried about the effects of tougher regulations on funding costs and future profitability.
Hedge funds on both sides of the Atlantic made considerable gains by betting against banks' share prices during the financial crisis and DE Shaw's move will raise fears that some again sense an opportunity.

Might explain the rush to lighten the tills by the Banksters recently. They are probably in on the shorts--lighten the till and make a double killing shorting the stock. Shrewd move.

I have always believed the second leg of the crisis was due. Take cover, 2011 should be quite a tumultuous time for the markets. Commodity bubble bursting will add some spice to the recent doldrums.

Call me pedantic but the title this says "£100,000,000.00 placed against Barclay" the article says £97m.

What is the point of including the pence? Is it just to make it look like there are more zeros than the reality or make it harder to read?

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there is nothing in those charts that screams majorly overbought or oversold........what gives?

I've even checked out MACD for this one,..and that's usually a very good indicator of price action.

...strange.

if anything it now looks like quite a good buy.

The projected move is denoted by the arrows. Yes, now would be a good time to "cover" your shorts.

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The trade went initially in the wrong direction. My stop would have been 400p at the next resistance, but it would have been a long wait* for a "catalyst" to get the sell off we got.

*Without a trade plan, a long wait while you get bored, or question your own judgement.

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  • 442 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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