Investing

shorting Canadian Banks

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  • Aug 20th, 2017 6:52 am
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Apr 12, 2012
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treva84 wrote:
Aug 10th, 2017 5:43 pm
Oh interesting I thought this thread was locked but yes, not a good trade. Does anyone have any idea what the % loss to date would be?
He would have lost everything; including internet, so no one will ever know.
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treva84 wrote:
Aug 10th, 2017 5:43 pm
Oh interesting I thought this thread was locked but yes, not a good trade. Does anyone have any idea what the % loss to date would be?
The whole entire 'trade' though entertaining, was fake as a $3.00 bill but I believe someone did some calculating and the amount of capital required was in the $million+ range based on how many 'more shorts into the hole' he posted consecutively. On top of that, there's no possibility the IB would have let even a top-client hold onto their shorts positions for this long and this deep into the red without forcing a margin call..
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zobi123 wrote:
Aug 10th, 2017 6:37 pm
He would have lost everything; including internet, so no one will ever know.
This made me lol. Well done!
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Jeenyus1 wrote:
Aug 10th, 2017 6:37 pm
The whole entire 'trade' though entertaining, was fake as a $3.00 bill but I believe someone did some calculating and the amount of capital required was in the $million+ range based on how many 'more shorts into the hole' he posted consecutively. On top of that, there's no possibility the IB would have let even a top-client hold onto their shorts positions for this long and this deep into the red without forcing a margin call..
What? IB didn't get the memo his miners are up huge?
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boyohboy wrote:
Aug 10th, 2017 11:59 pm
What? IB didn't get the memo his miners are up huge?
Yes they are up huuuuuuuuge!
leflower wrote:
Nov 16th, 2016 8:07 pm
stepped in again to FR for .30 cents cheaper at 11.65 and got SSO again at 13.40. My feeling is we have hit the lows and not much lower to go from here.
Yellen will give us a word on rates tomorrow am and my guess is she will say 1 cut with no more coming. Gold should fly.
TSX: FR $8.58
TSX: SSO $13.13 (he was somewhat lucky this just recently jumped up... this must be the huuuge he was talking about :P)
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Oct 21, 2014
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This thread stands as a textbook example why you shouldn't let personal political views and kooky zerohedge articles control your money. I don't know why it was unlocked, it should have stayed buried.
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Gungnir wrote:
Aug 11th, 2017 9:59 am
This thread stands as a textbook example why you shouldn't let personal political views and kooky zerohedge articles control your money. I don't know why it was unlocked, it should have stayed buried.
Perhaps that's the reason why the mods have unlocked it; for us all to learn an important lesson.
[OP]
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Dec 13, 2014
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Hampstead, QC
Still short and still part of my big picture portfolio. I admit my timing was off, but the reasons why I feel the banks will crater are even more obvious to me today.
Oil is not going to come back and help Canada's economy, and housing is just slowly starting to deflate...the crash is not yet here as the loan loss provisions.
The smart money is exiting now as we have FINALLY broken to 200 SMA...and for chart readers, the last time that happened we saw a 30% correction. I am waiting patiently and will win with this trade. GL to all and pay attention to the charts and macro scene.
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Dec 3, 2014
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leflower wrote:
Aug 12th, 2017 1:46 am
Still short and still part of my big picture portfolio. I admit my timing was off, but the reasons why I feel the banks will crater are even more obvious to me today.
Oil is not going to come back and help Canada's economy, and housing is just slowly starting to deflate...the crash is not yet here as the loan loss provisions.
The smart money is exiting now as we have FINALLY broken to 200 SMA...and for chart readers, the last time that happened we saw a 30% correction. I am waiting patiently and will win with this trade. GL to all and pay attention to the charts and macro scene.
If you hold out long enough, eventually you will be right - i.e. a broken clock is right twice a day. Does that mean you were right? Does that mean this is a good trade?
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Aug 14, 2010
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leflower wrote:
Aug 12th, 2017 1:46 am
Still short and still part of my big picture portfolio. I admit my timing was off, but the reasons why I feel the banks will crater are even more obvious to me today.
Oil is not going to come back and help Canada's economy, and housing is just slowly starting to deflate...the crash is not yet here as the loan loss provisions.
The smart money is exiting now as we have FINALLY broken to 200 SMA...and for chart readers, the last time that happened we saw a 30% correction. I am waiting patiently and will win with this trade. GL to all and pay attention to the charts and macro scene.
What a goof. You're done bud. 18 months is over. You lost. You're wrong. Move on.
You're just another noob who thinks he can time the market. A dime a dozen.
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May 11, 2014
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Start date of this post Feb, 9, 2016

Royal Bank Feb 9, 2016 $71.14 -> Today $92.51 +30.04% plus dividends of $5.02, so +37.10%(assuming not reinvesting)
TD Bank Feb 9, 2016 $52.40 -> Today $63.56 +21.30% plus dividends of $3.40, so +27.78%(assuming not reinvesting)

Gold Feb 9, 2016 $1198.70 -> Today $1289.20 +7.54%
BMO Junior ETF Feb 9, 2016 $5.61-> Today $8.62 +53.65%

I want to be objective here. Gold has done ok and junior minors have done extremely well. I believe there is a higher risk with Canadian banks especially right now. That wouldn't mean I would want to short these players. You may be perfectly right that banks are very risky, and sometime in the short term, there could be down pressure or stagnant growth. but why would you risk so much money shorting and holding on that short for so long? It ate your gains and then some.

Taking a quick look at some of your posts, I also see some miners that have done well.

eg.

CDE Coeur Mining up 204% since Feb 12, 2016

But you didn't buy at the right time either...
leflower wrote:
Feb 5th, 2017 11:27 am
So far in 2017 my paper pains on the positions I took on last tax loss selling days:
FR; bought at 9.90 vg, 12.97 32%
SSO: bought at 10.97 avg, 14.36 31%
CDE : bought at 8.90 us , 11.69 31%
...although, am I incorrect, and you meant you sold and took a gain by selling on this post? (not clear by when you say paper)

So rather than just rag on you, I would like to know why you believe that shorting on a pair in your trading and investing is a "safe" bet? To me, shorting should only be done on a short term basis.
eg.
I shorted Sears Canada over the last few months, but it didn't go as smoothly as I would have expected (I as a rule, generally, never short). There were times when the shares were called back, and I had to buy the shares when the brokerage called it in, not because I was losing money (I was doing well), but rather the shares were no longer available. In your case, banks, you would have to not only have to hold for so long, you lost on the movement and you continually had to pay dividends. Nowhere in your posts could I glean any investments that were truly "successful." The only one I could see a relatively good trade would be First Majestic IF you sold last year. If you haven't, you would have lost all your gains. Knowing you have shorted banks as a "pair-trade," do you still hold these shares then?

So if anything, let this be a good learning opportunity for those who want to consider shorting. Even if OP is "correct" and a correction is to come in the future, the shorter is in the position to continually pay dividends, borrowing costs, and possibly having your short called in at moment's notice. When it is called in a moment's notice, even if you are correct technically, you have to book your loss and you are in a worse off position. We can't assume a correction is going to occur soon. I personally, am not a big fan of the Canadian banks at the moment, but that doesn't mean I would go shorting them. You have much less control when shorting and in this OPs case (if he actually did perform this trade), got the very short end of his stick.

As a investor and trader, I have made bad trades myself (HCG, Toshiba ). But I would never double-down just to save face. I would close them and notch them down as a lesson learnt.

So unless BMO Junior Gold ETF was your largest position (It isn't, because you have stated many times, it is First Majestic,) you are definitely not gaining much as of right now.
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[OP]
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Regarding the miners I sold half of my FR at 20 bucks and held the other half while trading around that position. I have fully exited that trade recently and cashed out...I am still in SSO now SSRM Mining as the company is showing great cash flows and is profitable. Its my largest position. I hold a minor position in CDE. My largest investment besides my real estate is gold and will stay that way. In the miners overall I have booked over 100% gains in 2 years and hold a profitable position in SSRM at the moment.
Regarding RY, its been a bad trade for sure so far, as the divs have hurt and presently my cost is down...so of course I was wrong with the trade...but my reasons were correct and still are thus I held out...I am happy as finally seeing light at the end of the tunnel with the latest breakdown in charts as well as oil scene nowhere near improving. This can break down extremely quickly IMO.
Good luck to all in your investments and pay attention to the banks as they are breaking down presently.
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leflower wrote:
Aug 13th, 2017 1:11 am
Regarding the miners I sold half of my FR at 20 bucks and held the other half while trading around that position. I have fully exited that trade recently and cashed out...I am still in SSO now SSRM Mining as the company is showing great cash flows and is profitable. Its my largest position. I hold a minor position in CDE. My largest investment besides my real estate is gold and will stay that way. In the miners overall I have booked over 100% gains in 2 years and hold a profitable position in SSRM at the moment.
Regarding RY, its been a bad trade for sure so far, as the divs have hurt and presently my cost is down...so of course I was wrong with the trade...but my reasons were correct and still are thus I held out...I am happy as finally seeing light at the end of the tunnel with the latest breakdown in charts as well as oil scene nowhere near improving. This can break down extremely quickly IMO.
Good luck to all in your investments and pay attention to the banks as they are breaking down presently.
curious, you did sell in the $20s? There is no mention of this trade in your posts until your post in Oct 5, 2016 after FR had nearly dropped 50% from the 20s.
leflower wrote:
Oct 4th, 2016 11:09 pm
simple: I did take some profits in the MINERS over the past few months as the position simply became too big and I had to take some profits. I sold zero gold.
There is no contradiction. I am still short RY with much more money in the miners and gold.
BTW, these new rules on mortgages are very negative for Canadian banks and as I predicted the govmt wants Banks to take on more risk rather than the CMHC. While my Bank trade has not made too much headwind I believe the stars are lining up for the correction that I expect. Good luck all.
And as you can see I am NOT emotional about stocks as I tried to advise people NOT to buy the miners into the euphoria and wait till the 200 DMA is challenged ( while being long )
Also you tell others to take profit Dec 15
leflower wrote:
Dec 15th, 2016 11:47 am
sold the remainder of my miners today including FR...Overall I sold 1/2 in summer and half yday and today...Banked 120% on the miner trade which was 80% of my portfolio...This bull market in gold and metals is likely just a micro bull market and IMO profits should be taken.
Pretty much the bottom of the prices. Not a very good move on your part when if you would have held on, you would have been fine with your miners.

Part of me suspects there was a margin call on you Dec 15. 2016? Either way some really bad trades IMO.
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Oct 21, 2014
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Why must we keep feeding the troll?

Jeenyus1, emanon86, myself and others have called out why this guy is writing a complete bunch of nonsense. He doesn't even seem to realize why the banks came in recently is because of the NK crisis just like other equities. RY reports in two weeks, and while I have no idea how this quarter will go I do believe there will be a dividend raise which will increase the cost of this trade significantly.

This trade has every hallmark of a poor discipline: bad accounting, huge position size, averaging down a lost cause, thesis requires economic apocalypse to work. He also said he would move on after 18 months when the trade failed, and it has. What happened to that?

I'll quote myself for laffs. I purchased a fair amount of RY in Feb 2016 on leflower's recommendation, with real actual money. Thanks man, it's been great.
Gungnir wrote:
Feb 17th, 2016 7:47 pm
Shorting a stock temporarily depresses the price of the issuance, so actually you're on the side of a lot of investors, or herd as you like to call them. Banks are seen as forever investments by many Canadians, and for me the ownership interest in these banks form part of the generational wealth that will be passed to my daughters upon my passing in the far, far, far future. Since I never sell them and just collect the dividends, I need people to short the heck out of the banks so I can get the shares as cheaply as possible. I've been directing all of my dividend money back to purchasing BNS, CWB, TD and RY of late because of the panic. Shorting helps investors who are still accumulating wealth, it does not hurt them. I even bought RY at exactly $67.9 recently, perhaps it was you sold it to me :) .

You sure you want to keep up with this? You made some money and had some laughs, maybe you should cover and go have some fun with your winnings. The banks aren't going anywhere, the divs aren't going to get cut and we're in what looks to be the very beginnings of oil market stabilization which if it holds negates your thesis for the short investment in the first place.

Just a thought.
I'll leave this here for anyone who would like to read it. I don't engage in trading, however shorting a company that just had one of it's best quarters in history is likely to blow up your trading account. 2017 Q2 Press Release

Just a thought. :)

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treva84