Ah yes. In AMC and GME where retail is the whale, we have massive selling right now. Ok.
I saw the FTDs of GME in June and it’s crazy. More than the January run up. Probably even more crazy in July. Likely same with AMC.None of it makes sense. It's like our orders are being delayed, but only being put through when convenient, AND they aren't delivering on the shares.
This price we are seeing is DEFINITELY artificial. I guarantee you retail owns at least twice the size of this float right now.
A main concept is failure to deliver.I really wish I understood more of this better. LOL.
Any reading recommendations?
I worry about Citadel secretly paying some prominent figure and that person declares that a short squeeze is 100% to happen and people should put what they got into it. All to erase the wealth gap.I wonder if Citadel lawyers will have him recant this statement tomorrow, with bullet point reasoning why he was wrong with his conclusion.
A main concept is failure to deliver.
You buy 1 AMC share for $100. The 1 share shows up in your account and your balance lost $100.
However, the market maker or brokerage didn’t actually give you a share yet. According to the rules, they have 35 days to actually deliver that share.
So, the the market maker (Citadel Securities) and hedge fund (Citadel hedge fund) know they need to acquire that share within 35 days.
What do they do? They short the stock to make the share price go down. So hypothetically they short AMC down to $85 dollars. Then they buy the share and actually deliver it to you.
During the process they made $15. And they value of your share is now $85 (because it was shorted).
The concept is they are not immediately delivering you real shares. That’s a Failure To Deliver.
This can happen at an immense scale. Most of the time this shady tactic works in their favor. In other times it can backfire.
How can it backfire? They Failure to Deliver 500,000 shares of AMC at an average share price of $100. However stupid apes keep buying and holding to the extreme.
35 days from now the share price is at $125 and shares have become scarce. They have to now buy 500,000 shares from Apes who don’t want to sell. This causes rapid upward pressure on the stock.
That’s all just one aspect. And there may be several inaccuracies in what I said. My brain is as smooth as a skinless chicken breast.
No doubt they have multiple plans in play and will do anything/everything to avoid paying the piper.I worry about Citadel secretly paying some prominent figure and that person declares that a short squeeze is 100% to happen and people should put what they got into it. All to erase the wealth gap.
Then Citadel sues for market manipulation and gets an out somehow.