IBKR for you folks like me who forget what/who they are, are a brokerage firm that allows people to trade stonks outside the US. IBKR is short for Interactive Brokers Group, Inc.
Anyways, I wanted to do an analysis of what the IBKR Founder and Chairmen said (Thomas Peterffy on CNBC on the 28th), Feb 17th again on CNBC, and also on February 18th on CNN, and March 09 and how I read in to it. Simply connecting more dots like a seasoned conspiracy theorist or a Veteran Patterned Day trader with Stonk Market Apophenia. I gave you a hyper link for Apophenia, because you need to LERN SUM NU WORDS.
The meme stonks were originally heavily shorted stonks, they gained more momentum and bullish sentiment through the use of, you guessed it, memes. So they are meme stonks because of memes and being main stream, and pop culture. If we look at this as a financial war with meme stonks as the battle grounds, then GameStop is the ‘main battlefield’ sort of speak. The winner of the ‘war’ profits, and the loser, well, doesn’t.
And everyone is a rogue agent trying to make bands. Some just happen to want to send a message, but mostly everyone wants to make money. So it’s all a bet to see who wins, and most war (especially financial) is a battle of attrition.
So the GME short squeeze was well underway but it got peepee smacked by some insane Market Manipulatory moves, some (Paid and sponsored advertisement) News on January 25th said that Melvin Capital (the Defunct Hedge Fund as of 2022) closed their shorts and then some of the brokerages did some things. Such as not allowing you to buy in to GME.
IBKR decided to pull away from the meme stonks and disallow many brokerages from buying in to the meme stonks. They weren’t the only ones, as Merrill Lynch (Bank of America), Robin Hood and many others did the same. The blame went to the Clearinghouses, and everyone pointed the fingers around as no one wanted to take responsibility.
Yet what stands is that there was a restricting of the Buying, but not the selling of shares. Yea, an asymmetric halt controlling the basic market mechanics, totally rigged.
The Transcript on 28th Jan
Host: “Joining us now on a first on CNBC interview, interactive brokers Chairmen and founder Thomas Peterffy. Thomas, thank you for joining us.
Thomas: “Thank you for having me”
Host: “It’s great to have you on a day like today to help clarify what is going on. So explain to us, to our audience, why you have decided, like Robinhood, to restrict trading on shares of these companies like Gamestop and AMC.“
Thomas: “So Simply put, we are worried about the integrity of the market place and the clearing system. This is a new scenario and the fundamental values do not matter. Stocks that are worth single digit dollars go to several hundred dollars. For example Game(Stop) today jumped up and down hundreds of dollars at a time.
We are concerned about the ability of the market and the clearing systems to withdrew the onslaught of orders to continue to provide liquidity and are concerned at the financial viability of intermediaries and the clearing house.
I hope that the audience can follow this, for every option trade, there is a buyer and a seller. As many long options as there are short options. So when the stock moves either way, some options make money on one side, and the other side they lose money.
The Broker stands between his customers and the clearing house. So when some option holders make money, the clearing house has to give us the money to give it to our customers.
(all) while other option holders, sellers, or buyers on their own side lose money. We have to collect money from them and give it to the clearing house.
If our customers are unable to pay for their losses, we have to put up our own money.
Now, luckily enough, we have Five billion dollars of equity. So we (IBKR) don’t have a problem.
And we also have a very well automated risk management system, so we haven’t really gotten hurt. However I cannot say the same thing with full confidence about other brokers. I really don’t know where they stand so I’m extremely concerned.
As Game (stop) moved from $17 to $500, there are roughly three million contracts outstanding in the options market.
If one of those options is worth, say, every option is worth an estimate $10,000 dollars now.
That’s a loss of roughly 10 to 15 billion dollars on one side and 10 to 15 billion dollars of gain on the other.
I’m afraid there are brokers who may not be able to make these margin calls “
Host: So just to be clear, you’re worried about the middlemen. Are you doing this move to protect yourself, or to protect your customers?
Thomas: “Partly to protect ourselves, but mostly to protect our- of course to protect our customers! But most of all to protect the market place.
To protect the clearing house.
So if there are 10 to 15 billion dollars of losses in there, somebody has to pay them. Will they be able to pay -is the big question”
Another Host: “Thomas, do you understand people’s anger, your customer’s anger. Given that you essentially changed the rules of the game right in the middle of the match at the most important moment in the match. Even if your terms and conditions allow you to do that. Do you understand their anger that you’ve changed the terms of trade for them- just as things were getting heated up?”
Thomas: “I do, but when you say ‘right in the middle of the game’ then you’re saying as the squeeze is going on stronger and stronger. BUT THAT’S ILLEGAL, that’s manipulative.
So it cannot be done.
Also I think we are responsible for some of what our customers are doing,”
(And the interview is cut off)
They restricted trading, in the buy direction, because they were worried about the integrity of the markets.
It’s clear from the Trade volume alone, that there was a lot of Trading;
Leading up to the event, about 3 billion trade volume for a Security that has about 50 million shares outstanding. Yea, that means that of the free float of available shares to trade, the entirety was traded more than 60 times in the past week leading up to January 28th. That’s an insane number of buyers and sellers.
And the thing about trades is, that not all of it settles. It takes time for the money and the shares to settle. So as more people traded back and forth, there was more and more unsettled trades waiting settlement and delivery. Meaning the Risk Department’s math for how risky shit is went off the charts. It posed a systemic risk to the markets and the clearing houses.
So the Clearinghouses, like Apex and Fixed Income Clearing Corp. (IBKR) instituted some rules to reduce trade.
“we are worried about the integrity of the market place and the clearing system.“
There were too many unsettled trades and the Clearinghouses just couldn’t clear them. There was way too much money moving in the system. On top of the options chain, with the volatility of the price moving up and down, there was a lot of options being played. So much so that there were tens of billions of dollars not settled on either end of the options chain. Too much money to mitigate for specific Brokers or Clearinghouses.
So the powers that be, did something that felt rigged. In fact, it was rigged. They pulled the plug on the buy side of things.
And Thomas states that what the Host is implying is “ILLEGAL”.
Which, I mean, brokers stopped only the buy side of trading, and allowed the price to decline. That sounds very manipulative and illegal.
Well, to be clear, it’s not clear itself whether Thomas is saying ‘a Short Squeeze is illegal’ or if ‘manipulating and halting the Short Squeeze is illegal’. Either way, something Illegal happened or something Twice as Illegal Happened.
The Transcript on 17th Feb
Host: Brokers founder and chairman Thomas Peterffy. Thomas, good to see you again. Thanks for joining us. My first question is are you surprised and or disappointed not not to be a part of the hearing tomorrow?
Thomas: Oh no, I’m neither surprised nor disappointed. I, this is just fine with me.
Host: Just fine? I can I can imagine. So, what do you think will be the focus because there’s lots of angles here whether there was insider trading whether the likes of Robin Hood hurt their customers and whether the likes of Citadel are abusing their power? What do you think is the key focus in the likely outcome?
Thomas: So, what I would like to point out here that we have come dangerously close to the collapse of the entire system and the public is seems to be completely unaware of that including congress and the regulators. So, so let me explain to you that on on January 26th, Game had closed at $77 a share, the following day it closed at $148, the following morning on January 28th, the stock opened the $355 and traded up to $480.
At the same time, Game had 50 million registered shares outstanding and the short interest of 70 million shares. In addition, there were about one and a half million calls which would call for a hundred and fifty million shares. When the short when if the shorts sorry -the longs repay their margin loans and exercise the calls, their brokers would have had to be would have been obligated by the rules as they are today to deliver to them 270 million shares while they all buy only 50 million shares existed.
So, when the shorts cannot deliver the shares, the broker representing their loans must must by their rules of the system go into the market and buy the shares at any price pushing the price into the thousands. So, as the price goes higher, the shorts default on the brokers, the brokers now must cover themselves, they push the price further up so the brokers default on the clearing houses and you end up with a complete mess that is practically impossible to sort out. So, that’s what almost happened.
To avoid this in the future, the SEC needs to immediately go for reporting of short interests on a daily basis because they are currently only reported twice a month and I think they should increase margin requirements on shorts by one percent for every short, every percent of short interest. That will solve the problem.
This is a gapping hole that didn’t before because short squeezes are considered market manipulation which is illegal but so therefore nobody did it but with these social platform, platforms people can just chit chat and suddenly a short inter emerge without pointing at any one person who is guilty, right?
Another Host: So, so Thomas I mean it’s extremely complicated and and they’ll have to try to explain all this market structure in between some of the the populist grandstanding from from members of congress tomorrow. But ultimately, who are you saying is to blame if anyone for what happened?
Thomas: No, it’s nobody nobody is to blame. There is a hole in the system that we immediately have to stop. There’s a hole in the.
Another Host: Which is short interest reporting? (Talking over)
Thomas: Short Squeeze- Sorry?
Another Host: You’re saying that is the short interest reporting that’s that’s what was happening here? That was the problem?
Thomas: No, the problem was that the the there is no increased margin requirements on shorts as the short interest increases. As a matter of fact, we –most people don’t even know what the short interest is because it’s only reported once every twice every month.
Host: What what portion Thomas of your trading is payment for order flow? I know it’s a smaller percentage than than some of your rivals.
Thomas: Oh, it’s it’s it’s like three percent. . .
The Hearing mentioned was the following, the first FSOC hearing on GME;
“we have come dangerously close to the collapse of the entire system and the public is seems to be completely unaware of that including congress and the regulators.”
Shit was getting wild, and the entire collapse of the Financial System was eminent. All because of a single idiosyncratic risk of a stock. It was an impossible thing for anyone to deliver the shares that were shorted. I mean, think about it.
“deliver to them 270 million shares while they all buy only 50 million shares existed”
How is a regular Short seller going to deliver their short position against other short sellers that are to also deliver their short positions? They don’t have the capital to buy something that’s shorted more than 140%. And if the Short Sellers get fucked, then the Broker-dealer they went through is on the hook. If the Broker can’t cover, which statistically, they can’t. Then the Clearing Houses are on the hook.
How is a Clearinghouse going to close 270 Million share positions when only 50 million shares are outstanding? They’d have to buy the share for more than what it’s worth and then deliver it and then buy it back again at a higher price. They’d have to do this atleast FIVE times for EVERY share outstanding. And that’s assuming that the all shares outstanding are up for sale. Mathematically, no one has the money to cover that.
Theoretically, the price could have gone to millions or infinity. Theoretically of course.
I’m sure many people would’ve settled for a couple thousand per share. But of course, the Clearinghouses couldn’t deliver 270 million shares at a price of $1,000 a share or more. That would be atleast $270 billion dollars. I doubt many entities in the world have even close to $270 Billion dollars LIQUID. That’s ridiculous.
So the Clearing houses knew they didn’t want to be responsible for this mess and forced the hand of the Brokers to post collateral that they couldn’t. All of this resulting in Brokers restricting trade in a single direction.
Many parties to blame here.
Blame the Short Sellers for getting in a stupid position. Brokers for allowing it. Clearinghouses for not doing their job in Clearing and insuring trades. And all of the above for restricting trade and trying to cover this whole thing. There’s more blame to go around, but everyone lost in this event. All major parties lost, the exception is a few lucky Long traders and really lucky Short traders that made their bones and left. But everyone else? They lost. A vast majority of retail traders across the World, lost. It’s a real tragedy. Brokers lost, lost credibility, so did many Traders on both sides, and Clearinghouses and Market Makers too.
Shakespeare needs to write this Tragedy.
Another interesting thing is that Thomas goes for the SEC to make “daily short interest reportable” and that that “would mitigate all of this”. They’d have to compete with eachother to buy back their short positions and close em. Not only that, Thomas goes so far as to say “They should immediately do this”. This would help to prevent having ridiculous short interests. Having more than 140% short interest is insane, and shouldn’t happen at all. The Daily Short Reporting would factor into risk assessment and ensure and insure the underwriting at Clearinghouses and Brokerages to not be retarded.
Guess what hasn’t happened as of writing in the Year 2023? Exactly that. The Short Interest report is still twice a month.
In regards to the tidbit about Short Squeezes are illegal, well yes. But the interesting factor is that it’s crowd sourced and there is a bunch of independent investors. So you can’t blame any single investor for a short squeeze. Because no single investor is responsible or capable of short squeezing the stock by itself. It took a collective crowd sourced effort, which the laws and rules didn’t account for, and thus no one was technically committing anything illegal because there was no collusion or conspiracy to squeeze. It just sort of happened on the open market, very interesting sociological phenomenon.
Also, since short squeezes are illegal. We might want to slap a cease and desist on News companies and Media for posting shit posts about “potential short squeeze” or “Short Squeeze indicator” stocks. The Media advertising illegal shit is beyond me. They should be held liable.
The Transcript on 18th Feb
Host: Let’s just start with a simple question. How close we were to this system breaking, something failing? How close were we, Thomas?
Thomas: We were frighteningly close on on January 28th when we had 50 million registered shares at the same time we had 70 million shares short and 150 million, 150 million shares short via short call options. So, if the call options had been exercised, the shorts would have had to deliver 270 million shares while only 50 million shares existed.
So, as the rules are today the long broker has to if he can’t get the shares he has to go into the market and buy the shares at whatever the price is. So, that could have pushed the price further up into the thousands.
When that happens obviously, the shorts cannot pay up so the brokers they default on the brokers, the brokers default on the clearing house and the the whole thing is a is a huge mess that’s impossible to untangle.
So, there’s a simple solution for this the way I see it,
number one, we would have to get the the short positions published once a day because we currently have it only twice a month and
Second, we would the SEC would have to require brokers to charge an additional one percent of margin for every one percent of short interest and that would then raise the margins progressively so high that people would stop shorting stocks.
Host: So, margin requirements would have to increase as short interest increases. That seems to be the view from you Thomas. I’m just wondering from your perspective -overseeing a broker- is there anything you can do to protect your clients before the SEC or the regulator has to tell you to do it?
Thomas: Of course, we can. That’s exactly what we did. We increased our margins. So, we- (interrupted)
Host: So, why does the regulator need to make that decision on your behalf Thomas? I’m just speaking out loud with you, thinking out loud, trying to work through this process with you, why do you need the regulator to make that step?
Thomas: Right. So, first of all, I do not know the short interest daily and that would be important for me to be able to know how much to increase the share margins by so the regulators could require that the short interest be reported daily, that’s very simple.
Secondly, the regulators tell us the minimum margin we must charge and we are free to charge more and that’s exactly what we did. But some brokers may not be able may not know how to deal with this and that’s why, I think it would be good if the if the SEC required more brokers to charge more on shorts.
Host: Thomas another issue that came up as well. (Interrupting Thomas)
Thomas: Some brokers-
Host: Conflict of interest issue as well and I know for you that you have a different model you’re not reliant on payment for order flow in the same way other brokers are, but Thomas can you speak to that? The explosion of commission free training that we’ve seen over the last several years and in some parts dependent on the payment for order flow? Can we have one without the other?
Thomas: Can we have the explosion of interest in trading without payment for order?
Host: Can we have the explosion in commission free trading or at least the democratization of of markets that we have seen over the last several years without the payment for order flow factor in all of this?
Thomas: But but look I mean the the commission between zero and -for example, we charge less than like $1.95 cents on the average trade. That’s that that difference is almost negligible, right? So, I don’t -the average trade is is probably about, you know 40-to $50,000 so whether you pay zero or you pay two bucks, that’s not much of a difference, right?
Host: So, do you think the conflict of interest is not an issue?
Thomas: No, I don’t think so.
Host: Thomas what would you like to see asked today and who would you like to see those questions aimed at?
Thomas: I would like -I’ve well, I basically would like to ask the SEC why they didn’t act on on the morning of of January 28th because I I was so scared I can’t tell you how how scared I was.
Host: Well, Thomas what were you scared about? Just that what does failure look like? You said we came close to breaking, what were you scared of? what did you think was going to happen?
Thomas: I was scared of a domino bankruptcy. I mean I I tell you the rules require the long brokers to go into the market and buy the shares at whatever price. So, that drove the shares up to $480 and then suddenly, I I guess they they it didn’t go further but it could have gone further. So, if the shorts had known and if the longs had known that they had the right to ask for their shares.
Thomas: And and and they really wanted a short squeeze that’s what they would have done.
Host: You’re not testifying today. Have you spoken to the house financial services committee? Have you spoken to anyone in Washington about these issues?
Thomas: No, I did not.
Host: Are you looking at reaching out to them?
Thomas: Well, eventually they will, the SEC, will have to look into the the hole in the system and they will have to stop it and I assume that they will ask for comments and we will send them a letter.
Thomas reiterates that 270 million shares shorted out of 50 million shares outstanding results in possible share price in the thousands. That’s what many retail traders who went long were hoping for.
Thomas also wants the short interest to be reported daily, and also to have short interest pay additional interest per short percentage. These are very good solutions and I personally like them because they strike a middle ground between No Shorting and Wild-West style shorting.
A short seller wouldn’t want to report their short position, nor would they want to pay more money to keep their short open. Reporting the short interest leaves you exposed, it’s like revealing your hand at poker, and other people can decide to target you or not. There are already quantitative bots with algorithms that target heavily shorted stocks, so more interest reporting makes it all the more easier.
Also, if you’re trying to commit a crime like naked shorting or selling synthetic shares or phantom shares, then having a short interest reported daily is bad for business. Also paying more money is bad for business. These are the reasons why the Shorts wouldn’t welcome these changes.
But also, the current predicament is due to the greedy and failed fundamental analysis of the Short Play on GameStop. Even Citron Research got humbled real quick by the GME play.
It’s funny to note that IBKR and others increased their Margin Requirements to avoid stupidity. But the host sorts of interrupts him and says he’s speaking out loud. Like no shit. Someone on the ear phone was telling him to divert the conversation, obviously. It seems the talking heads don’t like the discussion of having the Regulators regulate more, like raising margin requirements. I personally don’t blame them, I don’t like more government influence. But if your risk assessment is wrong, then perhaps you need a new model. And perhaps you should pony up the money you owe if you lost. But, that’s just me.
“I was so scared I can’t tell you how how scared I was“
So Close to a Domino Bankruptcy. The short sellers, Brokers, Market Makers, Clearinghouses, to the DTCC. All the Major Financial Banks would be the Prime Brokers and Market Makers that would be on the Hook. So all the Major banks would have gone bankrupt. What about the DTCC? Can they go bankrupt? Idk, but the Central Banks would be responsible for bailing out and propping up the Prime Brokerages, or the Major Banks. The major banks would be zombie banks. But there still wasn’t enough money to ensure that the Central Bank could also stay afloat.
Yea, the whole financial system was about to collapse. It was a big deal. Most people didn’t even fucking know. It was going to be 2008 all over again but world wide, it would have been the Great Depression’s Grand Father. It would make the Great Depression look like a little bitch Recession. Probably.
So if the Central Bank goes bankrupt. Who bails them out? The Government? The World Banks? IMF? Rando Globo organizations of non-elected International Slush Funds? -And if that entity goes bankrupt, who bails that entity out?
Point is, a lot of people didn’t know how close the system was about to come undone like some Fight Club ending scene. It was that close.
And now we have two sides, we have the Old Financial Guard that doesn’t want to relinquish control. The Big money tycoons, whales, and juggernaut heavy weights of the Financial Theater. The Wall Street, the Guardians, the Citadels with their Virtu’s. Those that stand on top and be king of the hill for a while, they definitely don’t want to let go of the crown, nor their way of living.
And on the other side, we have disenfranchised retail investors slowly Direct Registering Shares. Taking the shares outstanding, one by one out of the system, Directly Registering each individual share. A death by a thousand cuts, millions even. Brick-by-Brick like Bastille being taken down. The Financial Matrix is losing it’s grip and something will most definitely happen when the last brick is pulled.
Both sides don’t seem to want to compromise. I don’t think there’s a middle ground that can be collectively met. I would love for one to be met, so we don’t ruin everything, shit is going to be Economically Violent. Especially since the Financial Old Guard has been hella hostile and pretentious and constantly issuing gaslighting statements. The Kleptomaniacs don’t want the dance to end. The Financial Old Guard has been pretentious cunts definitely atleast for the past two years. So, fuck em, rightly so.
And the Retail investors, they have to win. Because if they don’t their average IQ will realize that the game can’t be won. Meaning that the game is no longer playable. Resulting in a new game, one likely made with pitchforks and torches. Collective Bargaining and Strikes were a result of compromise. Humans aren’t so far advanced that they’d fail to plunder and pillage injustice. A Cornered dog will bite, desperation sets in and violence becomes the answer whether they want it or not. Patience, too, has its limits.
But it’s not up to them (The Old Guard) to decide whether they want to let this go or survive. And so shit is going to get really rough in the future. Especially since the Retail investors, the tired and weary, aren’t going to back down. It’s a financial war and there will be New Masters, or atleast a Radical Paradigm shift in change.
The Winds of Change are definitely blowing.
The Transcript on 09th Mar
Host: I want to get the investor take on all of this with Thomas Peterffy. He, of course, runs is -I should say the founder and chairman of interactive brokers. Thomas it’s great to see you. As you just heard we’re gonna have a whole conversation I think today in Washington about payment for order flow and and I know it’s such a complicated topic but the the question that I think everybody is trying to understand on a very technical basis is, if if if companies like Robin Hood like yours had to use just what they call lit exchanges just lit exchanges rather than to go through the Citadels of the world that are paying for the flow and whatnot, would they get better execution on price?
Thomas: My belief is, the short answer is yes, but let me explain why I think that. So, high frequency traders and brokers who sell their orders to to the high frequency traders say that the executions are better than what is being displayed in the public markets. And in addition, the brokers get paid for the order so that they can afford to charge zero commissions and therefore the customer is better off.
This sounds like a very compelling argument except for two things.
One, is the high frequency trader succeeded in diverting nearly 50% of the order flow from the public exchanges and as a result, the public exchanges have become less liquid and the bid and offers have, bids and offers have become wider. So, yes, obviously they give a slight improvement over the bids and offers which they have now made succeeded in making wider.
The second issue is that due to the lesser liquidity in the public markets, more and more institutional traders do not want their do not want to show their orders publicly because they don’t want to push the markets against themselves. So, instead, they provide interactive brokers and other brokers with their orders that we are keeping in the dark but we trade them against the order flow we get in. so, that many of these execution take place at the mid-price and and that is a good thing and that is now a slowly evolving trend.
Host: So, Thomas it sounds like it may very well be that today, right now, you would get better execution through a Citadel or a high frequency trader. But what you’re suggesting is that you need to remake the whole system because the system has been remade by these high frequency traders which have therefore perverted the market in some way, is that right?
Thomas: So, I’m saying that the system is remaking itself as we speak.
Host: And and so, if you were a a sitting senator thinking about these issues a policymaker perhaps you you could pretend you’re going to be Gary Gensler at the SEC, what would you do?
Thomas: I would do nothing. he he.
Host: You would do nothing? But you just said that the system isn’t working.
Thomas: No, I said that the system is in the process of remaking itself.
Host: But but just so, then I and maybe I’m missing something here. If we think that that customers are not getting the best execution because of payment for order flow as a function of this whole system remaking itself wouldn’t you want the SEC to unmake it or to remake it in a different way?
Thomas: I I would like the SEC on this topic to do nothing.
Host: I I’m confused why if you don’t think customers are getting the best execution.
Thomas: Because customers are on the way towards getting the best execution and very soon that will be the case. As more and more of the institutional order flow goes into the dark pools against which the customer orders gets upset, they will get better executions than they ever have gotten before.
The Hearing mentioned was the following, the second FSOC hearing on GME;
“interactive brokers and other brokers with their orders that we are keeping in the dark but we trade them against the order flow we get in.“
Thomas basically admits that Brokers and Market Makers are internalizing trades and trading incoming order flow with existing internalized order flow. Essentially saying that most trade happens off exchange. All of this is allegedly providing a price improvement.
He also fails to mention that these trades are essentially never reaching the lit exchange as is. They’re being paired with trades that make it to the lit exchange, meaning that price points can be altered and manipulated. There isn’t a price discovery when the majority of the markets happen, well, outside of the markets.
But if it’s not on the lit exchange, it’s not on the NBBO, then how do you know what price you actually got and if it’s an improvement? This is a matter of trust, especially without having open ledgers or accountability. Especially when Front Running Trades with HFTs already exist and many others have been fined on it. So, the average retail trader might not even be getting a good deal. It might be good, it might be worse. It depends on how much you Trust what they do.
Thomas also says that he prefers the SEC to be a lame duck. He wants them to sit out and essentially let the free market decide. Stating that the system is remaking itself.
And he’s right. The SEC is being a lame duck, they haven’t changed much. AND the free market is deciding. The market is evolving and changing.
The problem is, Thomas thinks that more and more of the markets will be internalized in ATSs and Dark Pools, which he’s right, but that’s not the change that guarantees better Execution. That’s not the change that is remaking the markets.
Instead, Retail investors are Directly Registering their Shares away from the Markets, reducing the Shares Outstanding and the Free Float. Less and less shares are available to manipulate in the Dark Pools and Internalizers.
So the Markets are changing and reinventing themselves. And Thomas is right in that;
“Customers are on the way towards getting the best execution and very soon that will be the case“
Because there won’t be any shares left in GME, and the music will stop, and we’ll see who has any Shares to stand on -or sit on? Things are going to get spicy, so -uh- Buckle Up. Tuesdays. 741. Tomorrow. No Dates. But also Tomorrow. Runic Glory. Talk is cheap. It takes money to buy whiskey. Tits? Jacked. And all that jazz.
There’s a lot of dots you can connect from the amount of words being said above. Don’t just take my analysis, I urge you to do your own Due Diligence.
It’s also to note, that a lot of these videos are probably edited for good reason. Ask yourself what is not said or left unsaid. What could the implication of that which is edited out imply?
Maybe a nothing burger, But I’d bet on my thesis that it isn’t. Especially when I do the legwork of my analysis above.
Notice how the Short Reporting requirements are not updated to be daily? Notice how mathematically it’s impossible to cover 270 million plus short shares when only about 50 million registered shares outstanding? Like you have to be really special at math to think the price of GME went DOWN when there were 270,000,000+ shares sold short when only 50,000,000ish shares were outstanding. The price wouldn’t go down, it would parabolically do the opposite.
Do the math. No way the shorts closed their positions.
Let me ask you this, why would the SEC and ‘regulators’ like FINRA delay Short Reporting?
The answer is simple, Because the last time the SEC issued an order about shorting rules in September 2008, the market collapsed that same month. The Regulators are being complicit and letting this game play out, buying time to help structure the Government and other branches for the unexpected catastrophe that is yet to come. An Idiosyncratic risk from an injustice financial system.
Maybe it’ll happen.
Maybe it won’t
I’d argue the Game is Still on.
Hell, I’d even Bet on it.
As always there’s No Safe Bets.
*Not Valid Financial, Legal, Life, or Any Advice
In other news, the Short sellers have found ways to kick the can even longer through many contracts and such. Delayed reporting of Swaps and very many sort of contracts. All of course, just adding more systemic risk to an already asymmetrically risky bet.
Melvin Capital -one of the Short Hedge Funds betting against Game Stop- on the other hand, they’re defunct now. Shut Down. They shut down around May 2022 because -reasons-. No large news, only that they’ve suffered losses and are returning money to their investors. . . In 2022. . . More than a year after the sneeze. . . One of the best and top performing hedgefunds went out of business. Weird. I thought they could recover from a big L. Especially if they were such high earners. . .
So if a Short Seller that has a bunch of short positions open, and they go out of business, then the other short sellers will have to pick up their cards. This is assuming there is a large ass short position open, which, I mean, chances are, yes. If no one picks up the short position, then all the other Short Sellers will have to pony up too, and likely go bankrupt as well. It’s a cascading Domino Bankruptcy of fellow Short Sellers.
All of the above is assuming if there was a large short position and multiple parties were involved.
As we speak, there’s an army of anonymous Retail Investors that are removing liquidity from the Market by Directly Registering their Shares in their name.
As it turns out, Retail traders and investors won, but they weren’t paid. After removing the buy button and all the rigged injustice, people took things personally. So if Short Sellers want to play ‘fuck-fuck games’ and prolong this can kicking, the retail traders decided to remove shares One. By. One. for the last two years or so. Soon the Shorts are gonna ‘find out’ after all the fucking around that they did.
Only a matter of time before the tied recedes, and then we’ll see who’s really swimming naked.
Post Post Script;
So I learned a bit more about Lord Peterffy, turns out, he’s a billionaire. And he’s Hungarian and an immigrant that followed the American Dream, helped oversee and built one of the first electronic exchanges in New York around 1977, and sold that to Citi Group. He’s a real Chad.
I have much respect for him.
Before, I had respect for him because he reminded me of my own Father. Now I have respect for him, because he reminds me of my Father even more, and he’s one of the early founders of the Electronic Stock Exchange.
He’s probably one of the best people on the Earth, if not the best, to talk and know about Market Structure. He’s got plenty of experience. And he seems like an upright chap. Very Zen with the whole ‘SEC should do nothing’. I really liked that answer.