The Lake Resources N.L. (ASX: LKE) share price is down 4.76% to 20 cents on Friday.
This follows a mystery 24% gain for the ASX lithium share yesterday despite no news from the company.
What's going on with the Lake Resources share price?
Well it's volatile, that's for sure!
At yesterday's intraday peak of 22 cents, Lake Resources shares were up by 35% from their Wednesday close of 16.5 cents.
Other lithium stocks delivered a mixed performance yesterday, so the cause of the spike in the Lake Resources share price remains unclear — but we canvas some possibilities below.
There is no news from the company today.
The only news yesterday was an announcement that Lake Resources would deliver a presentation at the XII International Seminar on Lithium in the South American Region in Argentina.
The presentation has not been lodged with the ASX at the time of writing.
Possible reasons for yesterday's share price spike
As stated earlier, on Wednesday afternoon the Lake Resources share price closed at 16.5 cents.
That was the lowest point it had traded at since early 2021, as shown in the chart above.
Back then, the lithium share was on a strong upwards trajectory to an all-time high of $2.65 in April 2022.
So, what could be happening is that short sellers are buying the lithium share to close their positions.
Shorting is a trading strategy generally only available to pro traders. It allows them to place a bet that a share price is going to fall.
As we reported recently, some short sellers have been closing their positions on Lake Resources recently.
The latest short position report from the Australian Securities and Investments Commission (ASIC) reveals 7.2% of Lake Resources shares are currently shorted. This compares to 9.09% two months ago.
Shorting dipped even lower to 6.34% in July, however, this was before Lake Resources disappointed the market with forecasts for lower production and higher costs.
There's also the possibility that (very) patient investors may be jumping into Lake Resources while it's at rock bottom lows, and this speculative buying may have contributed to yesterday's surge.