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Wally Fairway

By Wally Fairway
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Enchubben

Enchubben 5600

Posted
Posted
1 minute ago, Cheeseweasel said:

Citron Research Will Stop Publishing Short-Seller Reports

BY Dow Jones & Company, Inc.
— 9:56 AM ET 01/29/2021
 

A famed short seller is calling it quits.

Andrew Left, founder of Citron Research, on Friday said his firm will no longer be publishing short-seller reports, on the heels of backlash to his recent public skepticism about shares of GameStop Corp. (GME) Instead, the firm will pivot to providing insight into companies the firm thinks investors should buy, Mr. Left said.

AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH!!!!

haha what a pussy

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Hank_Hill
Hank_Hill

Haven't mentioned it because didn't need naysayers because it is stupid, but I'm a med student doing this almost purely on my student loans while they're at zero interest. I've made +$20k since Decemb

Hank_Hill
Hank_Hill

The real treasure is the friends we make along the way

BradInATX
BradInATX

As long as 700% APR payday loans exist, you can fuck right off with "protecting people from themselves".

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52-80

52-80 19377

Posted
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12 minutes ago, The Royal We said:

Fucking insane open for AMC, GME, NAKD, etc.

How long will the holders of these expiring futures contracts hold on today? 

RH capping sales on these, and a few others

meaning they know theres a shortage of deliverable-supply

meaning people will pile on it even more.  spectacular lulz

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52-80

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Posted
Posted
2 minutes ago, HoustonHorn said:

In on small positions on GME (will buy dips if it goes below $250) and AMC. Mainly for the rockets and the class action lawsuit.

So GME needs to close above what in order to start the chain of events towards infinity?

I think the mob wants to see heads roll. They need a carcass.  

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Wally Fairway

Wally Fairway 5675

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49 minutes ago, The Royal We said:

Fucking insane open for AMC, GME, NAKD, etc.

How long will the holders of these expiring futures contracts hold on today? 

They will hold them to the close if they are in the money, and that is the gamma squeeze that plays out next week as shares have to found to fulfill the calls that expire in the money.

LOL - I haven't looked at the GME options tree all week; and I see that you can now buy/sell options with strikes up to $650 - it was only 2 weeks ago that $60 was the top of the options pricing chart. The 2/5 expiry GME $800 calls are priced at $77, so somebody thinks this shit will continue to go up, a $350 strike is $124, and there is activity in both of those. Hell there are 2,680 open call contracts for the 2/5 $570 strikes.
and the $80 calls that I was looking at (mid Feb expiry) that cost about $4,000 on Monday or Tuesday are worth $26,000. 
Run Forrest Run

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cam4mav

cam4mav 772

Posted
Posted
1 minute ago, Nice Guy Eddie said:

Are there still large blocks of shorts that are getting killed, or have most of them dropped out now?  

 

Just now, Hank_Hill said:

Yea is the short squeeze even a possibility anymore?

http://isthesqueezesquoze.com/?fbclid=IwAR3wXqrnPOK6D-XqngusKoMMAgkJW2FfSKP6Keol-aMG8LyKaMIkUSl5edo

the squeeze has not been squoze.

GME shorts have not begun to close their positions in substantial numbers.

the situation (1/29 10 AM ET):

 

  • short interest: 75.54% of float by Ortex, 113.31% of float by S3 Shortsight
  • short share public availability: 0
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The Royal We

The Royal We 3100

Posted
Posted
5 minutes ago, HoustonHorn said:

In on small positions on GME (will buy dips if it goes below $250) and AMC. Mainly for the rockets and the class action lawsuit.

So GME needs to close above what in order to start the chain of events towards infinity?

 

3 minutes ago, Nice Guy Eddie said:

Are there still large blocks of shorts that are getting killed, or have most of them dropped out now?  

http://isthesqueezesquoze.com/

According to this the short of float is still 75%+ this morning. 

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52-80

52-80 19377

Posted
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Webull CEO came out and explained why they restricted buys. It sucks for their customer, but at lest he explained it more cogently than Robinhood guy who looked like a mumbling idiot. 

 

All they had to say was “we had liquidity & deliverability issues”.  
 

Guy tanked that company overnight. 

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Anastasis

Anastasis 23720

Posted
Posted
3 minutes ago, Wally Fairway said:

They will hold them to the close if they are in the money, and that is the gamma squeeze that plays out next week as shares have to found to fulfill the calls that expire in the money.

That's gonna be a lot of coin for some of the small guys to come up with. I'd be exiting the position and pocketing the cash. 

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Wally Fairway

Wally Fairway 5675

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28 minutes ago, Anastasis said:

That's gonna be a lot of coin for some of the small guys to come up with. I'd be exiting the position and pocketing the cash. 

Absolutely - I would too, but that stops the infinite loop, which is how this slows down. It won't unwind the shorts, but it halts the gamma squeeze. 
And it would be crazy to hold shares at today's close, and take risk of huge swings that are happening in the stock

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hayden_horn

hayden_horn 11402

Posted
Posted
41 minutes ago, Wally Fairway said:

They will hold them to the close if they are in the money, and that is the gamma squeeze that plays out next week as shares have to found to fulfill the calls that expire in the money.

 

37 minutes ago, Anastasis said:

That's gonna be a lot of coin for some of the small guys to come up with. I'd be exiting the position and pocketing the cash. 

 

4 minutes ago, Wally Fairway said:

Absolutely - I would too, but that stops the infinite loop, which is how this slows down. It won't unwind the shorts, but it halts the gamma squeeze. 
And it would be crazy to hold shares at today's close, and take risk of huge swings that are happening in the stock

can yall take a quick moment to explain to an unfrozen caveman stonker what you are saying here? i think i understand, but when would be optimal to let go of gme? hold over the weekend? my understanding was that today would be the day for the squeeze. am i wrong?

thanks in advance

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wildcat09

wildcat09 29579

Posted
Posted
8 minutes ago, hayden_horn said:

 

 

can yall take a quick moment to explain to an unfrozen caveman stonker what you are saying here? i think i understand, but when would be optimal to let go of gme? hold over the weekend? my understanding was that today would be the day for the squeeze. am i wrong?

thanks in advance

Yeah. I'm too much of a pussy to get into this for real right now but bought 1 share for the lulz and would like to know if I should actually buy more.

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GRHorn

GRHorn 105

Posted
Posted
13 minutes ago, hayden_horn said:

 

 

can yall take a quick moment to explain to an unfrozen caveman stonker what you are saying here? i think i understand, but when would be optimal to let go of gme? hold over the weekend? my understanding was that today would be the day for the squeeze. am i wrong?

thanks in advance

I’m holding, just for kicks. I think the autists will “hold the line”. Lol

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cam4mav

cam4mav 772

Posted
Posted

lmao this dude on cnbc was just explaining exactly what was going on in clear easy to understand terms and as soon as he said "unlimited downside for shorts" this lady cut him the fuck off and pivoted to "tell me about robinhoods business model" and she looked nervous as hell while doing so. Fuck these people

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Eastwood

Eastwood 4394

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Posted
lmao this dude on cnbc was just explaining exactly what was going on in clear easy to understand terms and as soon as he said "unlimited downside for shorts" this lady cut him the fuck off and pivoted to "tell me about robinhoods business model" and she looked nervous as hell while doing so. Fuck these people
CNBC has had a funeral type atmosphere all week long.
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cam4mav

cam4mav 772

Posted
Posted

It's embarrassing. At least the main news channels like Fox and CNN are used to clearly propping up one side blatantly and smiling through the obvious fuckery.

These guys are suddenly in a position where they are attempting to back a certain side that clearly looks to be in the wrong and they have no practice at it.

It's uncomfortable to watch and unconvincing at best. Fucking schills can't even let someone finish a sentence that contradicts their mission.

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Trey3216

Trey3216 15452

Posted
Posted
1 hour ago, Wally Fairway said:

They will hold them to the close if they are in the money, and that is the gamma squeeze that plays out next week as shares have to found to fulfill the calls that expire in the money.

LOL - I haven't looked at the GME options tree all week; and I see that you can now buy/sell options with strikes up to $650 - it was only 2 weeks ago that $60 was the top of the options pricing chart. The 2/5 expiry GME $800 calls are priced at $77, so somebody thinks this shit will continue to go up, a $350 strike is $124, and there is activity in both of those. Hell there are 2,680 open call contracts for the 2/5 $570 strikes.
and the $80 calls that I was looking at (mid Feb expiry) that cost about $4,000 on Monday or Tuesday are worth $26,000. 
Run Forrest Run

Bull Call Spread on the 350 and 800 would be a really solid play.  

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Trey3216

Trey3216 15452

Posted
Posted
1 hour ago, 52-80 said:

Webull CEO came out and explained why they restricted buys. It sucks for their customer, but at lest he explained it more cogently than Robinhood guy who looked like a mumbling idiot. 

 

All they had to say was “we had liquidity & deliverability issues”.  
 

Guy tanked that company overnight. 

Got this from another board.  Explains the machinations of the purchase restrictions a bit.  Yes, it's TLDR and lot's of math.  Worst of both worlds...

 

 

Robinhood (RH) is a broker. They don't execute stock orders themselves. They sign up customers, route their orders to executing brokers, and keep track of who owns what. RH is also its own clearing broker, so they directly settle and custody their clients' securities.

Yes, RH is paid by Citadel to handle executing some of its order flow. This isn't as nefarious as it sounds - Citadel Equity Securities is paying to execute retail orders because they aren't pernicious (like having 500x the size behind them).

RH customers buy and sell stocks. Those trades don't settle (settle = closing, the exchange of cash for security) until T+2, two days later. Depending on the net of buys/sells, RH is on the hook to pay or receive that net cash. That's credit risk.

NSCC is the entity that takes that credit risk. It matches up the net buyers and sellers, post-trade, and handles the exchange of cash for security. To mitigate the credit risk that one of the clearing brokers fails, they demand the brokers post a clearing deposit with them.

The NSCC is required to do this by SEC rule, tracing to Dodd-Frank. Here's the details: sec.gov/rules/sro/nscc
Everyone posts, and if a broker fails, then NSCC takes any losses out of that broker's deposit, then some from NSCC, then from everyone else (the other brokers).
This is a post-crisis idea encoded in Dodd-Frank that making everyone post collateral reduces the credit risk and systemic risk and such.

So how does the NSCC clearing deposit get calculated?
It's basically Deposit = min( 99% 2d VaR + Gap Risk Measure, Deposit Floor Calc) + Mark-to-Market ... math and jargon!

Let's use an example. Say Fidelity has clients who bought 2bn of stock and sold 1.5bn of stocks. First, net down buy/sell between customers in the same stock.

Say that leaves 1bn buy and 0.5bn sell. Run some math to answer "that won't move more than X with 99% odds in the next 2 days." Let's say that's 3% of the net, so 3% * (1bn-0.5bn) = 0.15bn = 15m. That the 99% 2d VaR.

Next, we ask "is any one stock net more than 30% of the net buy/sell" ... and if it is, then we take 10% of that amount and add it as the Gap Risk Measure. So if Fidelity customers bought 200m IBM, then add 20m to that 15m. That's Gap Risk Measure.

Deposit Floor Calc is some thing that looks at the 1bn buy and the 0.5bn sell and does a small calc and adds them, so that if the first calc (99% 2d VaR + Gap Risk Measure) is small, then this floor will keep the overall from being tiny.

Then, last, you add Mark-to-Market. Basically if your customers bought IBM at 140/shr and it goes to 110/shr before it settles for cash at 140/shr, the NSCC has 30/shr of credit exposure to the clearing broker and that amount gets added to the required collateral posted to NSCC.

There are some other items, but that's the basic idea - full details are here: dtcc.com/-/media/Files/
The NSCC sets the framework, but it is spelled out in Dodd-Frank that they have to do so by law.
These deposits are held in the Clearing Fund at the NSCC.

Financials are here: dtcc.com/legal/financia
They had 10.5bn in the Clearing Fund as of Sep 30, 2020.
This is the regime post-Dodd-Frank. NSCC updated it's rules in 2018 to improve the VaR calc and to add the Gap Risk Measure.

How did this impact Robinhood?
Well, let's say Robinhood had $20bn of client assets starting 2021. Those customers used to trade $1bn/d say. What is the context for Clearing Deposit? Say 2 days it's a little unbalanced and it's 1.2bn buy and 0.8bn sell. Ok, that's probably around 12m, maybe 20m deposit.

If they take in $600m of new deposits and say $400m wants to buy GME. Plus of their $20bn existing, say there is $400m of GME buys over the past 2d. Then the picture could look like 2.0bn buys and 1.0bn sells, which might normally be 30m deposit. But volatility went up. A bit.

Now 99% 2d VaR is much higher. It should be 20x higher for their net portfolio, but the formula will smooth it out some. Maybe it's ~4x bigger. So just on VaR, they have to post 120m now. That they should have.

The Gap Risk Measure is what kills them.
If GME is over 30% of their net unsettled portfolio, then they are required to post 10% of all the GME buys. So if that's 800m, they have to post another 80m. And there is no limit to it. As long as their clients are up P&L, the mark-to-market covers it.

But if RH takes in 500m of new money and 300m buys GME, then at minimum they are looking at posting 30m+ from just that exposure at NSCC. They cannot use client money - RH has to use their own resources to post. And if GME stock drops, RH has to post the loss pre-settlement.
This would also explain why RH drew its credit lines and said vague things about clearing requirements. bloomberg.com/news/articles/

The policy goal here is to avoid the central plumbing entities from taking credit risk. In reality, such regulations raise costs and create barriers to entry. It raises profits for entities like DTCC (which owns NSCC and is itself owned by Wall St)

RH offered to open up stock market investing more broadly. They succeeded, clearly. But the regulations didn't change - there are still pro-Wall St, pro-incumbent rules and capital requirements. It's one of the most highly regulated industries in our nation.

So @AOC is right to ask how it can be that Robinhood stopped its clients from buying certain securities. And what she'll find is that the reason is that Dodd-Frank requires brokers like RH to post collateral to cover their clients' trading risk pre-settlement.

And it isn't the Fed or SEC who sets the rules. It's the Wall St owned central clearing entity itself, DTCC, that makes its own rules. So when the retail masses decided to squeeze the short-sellers, in the middle of crushing them, it was govt regulations which tripped them up.

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B00M

B00M 6734

Posted
Posted
Just now, cam4mav said:

It's embarrassing. At least the main news channels like Fox and CNN are used to clearly propping up one side blatantly and smiling through the obvious fuckery.

These guys are suddenly in a position where they are attempting to back a certain side that clearly looks to be in the wrong and they have no practice at it.

It's uncomfortable to watch and unconvincing at best. Fucking schills can't even let someone finish a sentence that contradicts their mission.

I couldn't believe it. I hate myself so I turned on Tucker Carlson last night and he was knocking this outta the park. He glazed over some details for the sake of his audience but certainly wasn't suckling billionaire peen.

 

In other news

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RCRanger03

RCRanger03 1049

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Just wanted to let yall know I'm not able to come to this thread during work hours on my computer maybe for the foreseeable future

Something somebody posted flagged as a porn url and it reported me to my ITS director. Probably going to have to stay off the rest of the day except on my phone which will be very little. Hopefully they don't monitor me going forward.

Sent from my SM-G970U using Tapatalk

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Wally Fairway

Wally Fairway 5675

Posted
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Posted
6 minutes ago, hayden_horn said:

can yall take a quick moment to explain to an unfrozen caveman stonker what you are saying here? i think i understand, but when would be optimal to let go of gme? hold over the weekend? my understanding was that today would be the day for the squeeze. am i wrong?

thanks in advance

That is a discussion about holding options to expiration. If you have 10 call options for GME that expire at the close of the market today, at say $80, and the stock is at $300, and lets say those options cost you $4,000 each. So you put up $40,000 for the right to buy 1,000 share of GME; to exercise that right (hold to close) you then have to pay $80,000 to buy the stock that is worth (at close) $300,000. But the trick to that is that you have to have $80,000. So it is likely that many of those options will be sold before the close, for maybe $215,000,
Yes, you are potentially leaving some money on the table, but you are also not leaving risk on that table, nor are you having to come up with the cash to exercise the options or pay margin to borrow money to hold them.

There is a split strategy, that I'll approximate but I'm not doing the detail math, where you could sell 1/2 of the options and use that cash to exercise the remaining options to own shares (IMPORTANT footnote - put some of the cash you get away into a separate account, because you are likely going to owe taxes when you are making big gains)

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DonkeyCigars

DonkeyCigars 143

Posted
Posted
4 minutes ago, RCRanger03 said:

Just wanted to let yall know I'm not able to come to this thread during work hours on my computer maybe for the foreseeable future

Something somebody posted flagged as a porn url and it reported me to my ITS director. Probably going to have to stay off the rest of the day except on my phone which will be very little. Hopefully they don't monitor me going forward.

Sent from my SM-G970U using Tapatalk
 

Are you in an office or working from home? They can still see that WFH?

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RCRanger03

RCRanger03 1049

Posted
Posted
Are you in an office or working from home? They can still see that WFH?
At work... I haven't been allowed to work from home

I'm in the social services frontline work with current and formerly homeless folks

ALPP just released an offering watch out for a dip. This isn't a bad thing not very big but people almost lways dip on offerings. I used to make bank on FRSX offerings

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52-80

52-80 19377

Posted
Posted
17 minutes ago, RCRanger03 said:

Just wanted to let yall know I'm not able to come to this thread during work hours on my computer maybe for the foreseeable future

Something somebody posted flagged as a porn url and it reported me to my ITS director. Probably going to have to stay off the rest of the day except on my phone which will be very little. Hopefully they don't monitor me going forward.

 

I think it was the porn URL.

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cam4mav

cam4mav 772

Posted
Posted

 

 

What is Level 2 and why does it matter? Is this showing trade volume? I saved this bookmark last night but was a bit drunk and don't remember why.

Anyways nice little view of the hot stuff regardless. I was flipping tabs and hitting refresh on google like an idiot.

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