Impact of OB on premium holds
Apologies for starting another thread on OB, but I just wanted to clarify my understanding of one particular topic.
I'm assuming that the short term impact of OB on premium holds would be an increase in price.
Taking Neymar as an example, his current price is £8.44. His peak price at end of April was c. £8.85. Since there was no IS available during that time, the drop is purely a result of traders putting shares in the sell queue, with no willing buyers.
Now, when the OB opens, those needing to sell urgently, due to profit taking/change in personal financial situation etc. will remove their shares from the queue and accept a bid from a buyer between 60% and 98% of the market price. The buyer will hold their shares unlisted for some time, hoping for CA or a stream of dividends.
Altogether, this will reduce the sell queue, as the only traders keeping their shares there, would be those willing to sell, but not wanting to do so below the market price, which I suspect would be a fraction of those trying to sell now.
Please, let me know if am correct?
Splurger_Dan last edited by
Yes as things stand I think your right. Obviously the situation of the player at the time of matching engine implementation will have an effect on his price weather hes in or out of demand at the time just the same as ever
I personally think there won't be so much movement in the premium end (though I can think of a few players who stand to drop a lot) generally, because of the liquidity. People will sell and people will get a few bargains but not much happening.