Shares & Investments

Finding out short positions is pretty simple and something I do regularly if I’m buying or considering selling. It’s a forward indicator of sentiment and it’s fairly accessible data, especially in the US.

I agree that the people behind this are making money off the back of the people piling on, but the wallstreetbets people seem to be fairly sophisticated, I doubt its a hedge fund taking out competitors, the consequences of this activity is going to screw with all institutionals who short as part of their strategy.

In other news, robinhood the free trading platform at the centre of the Gamestop short squeeze has halted buying of gamestop, amc, nokia and a couple of other stocks.

They’re about to get class-actioned out existence.

Yeh it’s an absolute outrage that platforms like robinhood can block trades on particular stocks. It’s one thing if there’s a market trading halt but this is a completely different story.

If the purpose of stocks is for companies to raise money via long term investors making informed decisions about a company’s probable future profits then this whole GameStop saga is moving the whole market (be they small or large investors) away from that desired position toward day trading that responds to ill-informed rumour.

Something needs to be done about large hedge funds shorting companies and then artificially driving the price down, but it is not the biggest problem here.

It hasn’t been about funding companies for a long time and its already driven by day trading, High-frequency trading and market manipulation and has been for 15 years.

Ironically RobinHood, the free trading platform makes its money selling its dataflow to a High-Frequency trader (Citadel) who has just participated in the $3Bn bailout of Melvin

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You can check shorts here:

I used to have a browse through WSB from time to time, usually after they’d hit the front page of reddit after someone did something monumentally stupid. They absolutely would know where to look.

Amusing that the US may implement some financial regulations now that the average person took advantage and cost the big investors money.

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I loved how the ASX company with GME as their code went up like a rocket yesterday as well. This is such a great story.

Anyone have any rockets go off today? great day for the market

Just broad gains, though I’ve added 15% to my Audinate (AD8) holdings this week through a few cycles of trades.

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Ok.

So, basic shit here.

I have an accounts setup that is legacy from the late naughties. My transaction account, my credit card and an online savings account where I store my mortgage and bill money as I’m fortnightly pay with a monthly mortgage at my main institution. I have an online savings account with another bank that is legacy from when they had the highest online rate at about 6% in 2008, then GFC …

And my mortgage at a third institution.

Now talking to Jubal the other week and he mentioned the offset account thingy.

Do I get an offset account with my mortgage provider, pay goes into that, pay mortgage from there, get a day to day account with them and transfer money to that from the offset account and shove my credit card over too? My credit card has a low limit I can pay off in one cycle without too much struggle, comfortably in two. One bank instead of three makes sense to me and it’s not like online savings make anywhere near 6% anymore.

You will be lucky to find any savings account that is paying a higher interest rate than your mortgage so you will be better off putting all your cash in a single offset account (this is even before you consider that tax is applied to any interest you would earn on your savings account).

If you haven’t looked at it already, refinancing will likely get you a better rate and you can also find some offers that will give you cashback which offsets the mortgage refinance costs. As a refrence point my mortgage is 1.98% for the next 4 years (with a small variable portion that I can offset and make exrtra repayments to clear over the 4 years).

Most institutions will package a credit card free with your loan package.

This isn’t for everyone but I have my banks premium card free with my mortgage. This earns frequent flyer points so all spend goes onto the CC with the cash sitting in my offset for as long as possible before the CC interest free period ends each month. So this saves me interest and earns me a benefit, we also churn CC from other providers which has paid for two trips to Europe in 1st Class and multiple domestic and asian trips in business. Bascally we haven’t flown economy since 2012.

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I’ve got like three years left on a fixed rate.

100% of the loan fixed?

Most fixed loans don’t allow an offset unfortunately.

yeah it will be 100%.

I know you need to wait 3 years (unless breaking it early doesn’t cost much?) but yeah, next time consider a variable rate loan (there’s no lock in which is good) or you can also have a setup where say 50% is fixed and 50% is variable (you effectively have two loan balances). With that setup you can still have an offset account on the variable portion, and any balance in that account will effectively reduce the balance of the variable loan when interested is calculated. For example, lets say you owe $800k on your mortgage, you would have two loan balances of $400k each, plus an offset account. If you have $50k in your offset account, then when it’s time to calculate the interest, instead of calculating interest in $400k owing in the variable loan, they’ll calculate it as if you are only owing $350k.

It might be worth having a chat to a mortgage broker anyway. You might find that it will cost less in the long run to break out of your current mortgage and refinance.

I don’t like the variable thing.

I remember the damage 17% did.

I don’t really get how these things work but can you just get another fixed mortgage at current rates and pay off the expensive one?

There will be break fees for the existing fixed loan which can be quite cost prohibitive.

Yeah, exactly. Although each loan is different so it’s worth checking to see what the total cost would be.

The government (ASIC) introduced new laws in 2010 so that lenders couldn’t attach ridiculous exit and/or other fees associated with early termination/payout of a loan, so it’s much better these days. However, fixed loans can still have exit fees providing that they are reasonable.

The lender may allow you to have even say an 80/20 split, so that the 20% variable portion would still allow you to offset. In the $800k mortgage scenario, this would allow offset up to $160k of the loan value.

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