OTC gain in a non-CFD World

Before we begin let’s give some shit advice to pay respects to the Loss-Porn God, may thots and prayers guide you to the Holy Land of Guh and Gourd Futures.

Anyone who tries to teach you about the Stonk Market is there to scam you,

Facts.

Don’t buy a shitty course, unless it’s mine. Because you can obviously trust me. In fact, if you want to learn how I make my money disappear, subscribe to my OnlyFans link for great tips made for fans just like you.

You passive object, you

By the by, All courses are shitty, so don’t pay for them. None of these Cash Grab Gurus have anything worth salt that you couldn’t find if you actually wanted to be better. I mean, if you wanted to truly be better, you would simply be better.

Trust me, if these Guru’s knew how to make a bunch of money, they wouldn’t ask you for yours.

Duh.

or

In meme form,


Alright, enough side-tracking the entrance,

Here’s how the system Works;

This is generally speaking the simplistic plumbing of the average Investor or anyone who owns (or touches) a security whether it’s a car loan, student loan, mortgage, pension fund, 401k, etc.

I, of course, use the term ‘Investor’ as loosely as everyone else. There’s a bunch of boxes no one checks or cares to honor when it comes to the meaning of the word. So, definitely, don’t find out what it means to be a real ‘investor’.

If we focus back on securities/equities, your money is invested at least indirectly in stonks. Congratz.

-This is a Map
or model
Just read it,
If you need me to explain, then you’re a lost cause
Here’s the video I took this from.

This infographic is courtesy of the Institute of Training, By courtesy, I mean I snagged a screenshot and stole that shit. Metaphorically stolen, speaking for legal purposes, of course.

This is only to illustrate that you as ‘dumb money’ will be severely invested into the casino of Capital Markets, even if you don’t like it or want it. Welcome to the scam.

Alright, so you got a map. Good, you might use it. Or you might not and instead use it as kindling as you get lost in this next field exercise. By ‘field’ I mean ‘no’ and ‘exercise’ I mean ‘Safe bets’. Because let’s be honest, the only thing you should be exercising is cock demons.

Time to move on to OTC Gain->

WTF is OTC Gain?

Good fucking question, let’s address that with a distraction!

Are you Off Track yet?
Dis-Tract-ed?

An ‘OTC gain’ is when brokers trade against the clients that put their money in the brokerage. It’s sort of like how a bank loans your money that you store in the bank for safe keeping, but with stocks. Lmao, isn’t finance fucking great?

On one hand it’s scummy and akin to breaking the fiduciary agreement that a Brokerage ”””has””” with their client.

On another hand, the Brokers are just hedging their bets against a stupid “investor”. Hence dumb money.

Whether or not it’s moral, who cares. It happened, and is happening.

And OTC gains can happen with CFDs.

Contract-For-Difference (CFD) is like a fake share pegged to the value of an underlying asset. The contract is made between two parties, and the difference is what is owed between either party. It’s like owning the Change value of a share, without having to actually own it. The ‘Difference’ is -again- what is owed. If you need more info, click here or google it yourself.

Basically, you would buy some $SHIT and a Broker would route your long-order while also buying a CFD against your $SHIT (open a short position). This way if you made money, you’re good. If you lost money, your broker wins money. It’s a (hedge sort-of) against your dumbass.

This practice continues on in the Forex markets, but you know what happened to Contract-For-Difference (CFDs) in the United States?

They are banned

I’m not sure why, something to do with reporting practices and murky territory.

The SEC and CFTC probably got all retarded and banned CFDs (probably again) because they sound very similar to CDS’s where in 2008 people circle jerked and bet on swaps on swaps on swaps. After the 2008 blow out, Congress Grilled the SEC and bois, Banks got a pat on the back for blowing things up, and business kept going with a couple (hundred) thousand or so more suicides and gross amounts of economic instability band-aided by money printing.

So, uh, CFDs bad, I guess.

Thus the SEC in their infinite wisdom banned that shit,

Here’s another website that goes into detail,

However, the Ban only applies to the United States.

More specifically, Inside the United States.

And even more Specifically United States Citizens. Aka, you, probably.

If a Broker were to sell CFDs internationally, that’s not ‘technically’ against the rules.

As far as it reads, the Laws against CFDs apply only to US Citizens. . .

But US Brokers can offer CFDs to residents in other countries. . .

Or perhaps, US Brokers can buy off-shore CFDs via some weird backdoor financial Circle Jerk?

So in Theory,

A broker can sell you some shit Shares,

And buy a CFD using their parent holding company or sister holding company from an off-shore market maker. You can probably do this through some sort of weird bespoke portfolio or entranched bullshit, thereby minimizing legalities and the whole ‘directness’ of these trades. You know, muddy up the waters a bit.

Thereby Skirting securities law and also being able to partake in OTC gain by betting against your ass.

Here’s a Shitty drawing to help you understand;

To my knowledge, this is perfectly legal as long as there is enough bullshit hoops. Of course, nothing I say is legal advice, so this is purely speculation.

Think of these CFD Circle Jerks like Tax Avoidance, but for placing bets. I mean, If you can offshore IRS laws, you can probably Offshore SEC laws too. It’s like Transitive algebra or something.

You might also be able to do it this way below, but it’s less confusing so it’s more likely to be illegal or something.

And even if stonk goes up, Broker still wins.
House always wins
(unless there is a stock that poses idiosyncratic risks)

I’m not here to tell you how to structure a company.

I’m here to tell you that Dumb Money is getting bamboozled;

Point is OTC gain isn’t limited to CFDs on Forex markets.

And there is evidence of Prime Brokers, bankies, and such hedging their bets with CFDs ON US equities in foreign markets. Like this piece of Hearsay;

Here is a random Forex broker that I just googled and they claim to have US CFDs, so my theory stands as very fucking plausible that people might be conspiring to steal your money Acting in your best interests as a Fiduciary obliged Broker.

Afterall, stealing money is -like- the whole point of Retarded Degenerate Day Trading Price Discovery on a fundamental level.

-Some Random Forex Broker
I don’t recommend nor do I care about

But also, the title of this article is ‘in a Non-CFD World’ so let’s explore that part.

Imagine OTC gain without CFDs;

Alright, are you done imagining?

Turns out, a Brokerage can bet against you.

Yea, they don’t need CFDs to do it.

There’s a thing called Securities lending, and they can lend out your shares. The Brokers (‘technically’) require your permission to lend out your shares, however, many ‘investors’ don’t read the fine print. Even more so, you’d probably realize those shares aren’t even technically yours (look up street name).

That thing you don’t read?
Turns out, there are words on it.

Some shitty platforms don’t pay you for lending out your shares. Some good ones pay you for lending your shares. In fact, the good ones have an open disclosure and a feature that allows you to turn Securities Lending on or off.

In fact, some Shitty platforms give you Instant Margin Accounts on signing up, with the strings of lending your shares attached.

I’m not saying Robinhood is doing that, but Robinhood did give everyone Robinhood Instant or Margin accounts upon signing up.

Possibly, maybe, Idk but could some Shitty Broker be lending out your share the moment your buy order is fulfilled?

Thus, if you profit (unlikely by your loss-history), then your broker just has to recall some shares and sell it and pay you?

And if you don’t profit, then, the Broker can just keep your shares and give you your losings?

All the while that these brokers may work with large clients or big Market Makers to Manipulate prices to go up or down to cause you to do dumb shit. Like sell at a loss. You paperhanded bitch -Question-mark-?

Riggle me this

Alright, let’s dive into theoreticals,

So you buy some shares of $SHIT stonk.

Your Broker, with your agreement that you didn’t read, could lend out your shares the moment you buy em.

But also, what if your Broker has LITERALLY Trade data and behavioral patterns on how you function and how you trade? It’s like a game of poker, and they can see your hand. They literally know what shares you own, and your transaction/order history. They can look at your past trades and reasonably predict your future Toilet-paper-handed potential.

What if The Broker Sells your Order flow (Payment for order flow PFOF) to a complicit Market Maker?

(I’m not saying Robinhood does any of this, but they did Sell Orderflow to Citadel a Market Maker who did get fined for front running trades against the order flow they were executing.)

What if that Market Maker was also Complicit in USING THAT TRADE DATA OF YOUR PORTFOLIO TO BET AGAINST YOU. (this includes your margin information and behavior patterns).

And what if that Market Maker was Borrowing YOUR SHARES to bet and short against your long positions? You know, the Brokerage loaned out your shares to watch you lose and split profits with the Market Maker.

Coupled with some psychology, margin calling your ass, and your Level 2 Handy-Dandy Order (note) Book to see your Stop Loss Tree.

They literally have your portfolio info and margin requirements

That’s too fucking juicy not to short to oblivion breaking through those Chained-combo’d stop losses and create new resistance levels and profit on that swing trade.

Yea, uh.

If you don’t think that any of this is possible, than I wish I could see the world through your eyes.


Side note, food for thought;

Also if you want more to chew on, Learn a bit about Cede and Co and how you don’t really own your shares unless you DRS them. Because you degenerates buy under a broker and they register it to a streetname, therefore, you don’t have the rights you think you ought to because you’re technically not an investor in the eyes of the SEC. But, uh, that’s a conversation for another day.


In Closing

Robinhood Sucks, outside of all of this, That’s -like- my opinion. Man.

And This is what OTC gain would look like with CFDs and without CFDs. (Turns out, some Shitty Brokers can do both and would profit doubly as much on your loss. But they would SUFFER if you actually were to make profits. . . Like -say- a stupid Meme stonk.)

Either way, the conclusion is that there are brokers out their making money trading against you. The you that put your money in a broker. Which Brokers? I -obviously- don’t know, but at least one definitely is.

So, you’re the client, but you’re also the shmuck.

Think of this like the Casino. The high rollers win and stay around, while the one-time-wonders get churned for their money. Yea, you are a guest, but also the house prioritizes their other guests. The one’s that “tip” really well. You know, not you, type guests.

Anyways, The Stock Market is most definitely a casino in where you can gamble with other people’s Lives (through their pension funds).

And you can’t have a Casino without any guests, now can you?

It’s kind of like a Russian Roulette wheel with six chambers,
You know, People suck-start a bit and it ends with suicides.

Oh boy, I can’t wait until we bail out the bankies again after another round of 2008’s Go Fund Me.

*Not Valid Financial, Legal, Life, or Any Advice.


P.S.

You should check out this fire album (unrelated to anything on here) for no reason at all;

The Album
Unrelated and Unaffiliated

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