DILLIGAF
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Interesting post just now. I have no idea about all of this and can't see the nerds understanding it either:
viac112
Melvin and gang hasn't covered shit. They've been illegally "closing out" their short positions and if we hold they will 100% get fucked. There is far more nefarious shit at play.
So this morning I saw the S3 and Ortex data both report significant covering of short positions for GME. This absolutely threw me for a loop because Friday morning they reported above ~120% short interest still. I could not for the life of me figure out how someone could close >50% of short positions on such a tightly held stock in ONE day with very little trading volume in the week. This got me digging around to figure out what's up.
I started by looking into GME failed to delivers (i.e. short sellers not able to cover their position on a stock) for the first half of January and I was shocked to find that just in the first 15 days of Jan, GME had ~1.2 MILLION failed to delivers. This is before most of wsb or mainstream began buying.
What was interesting though, is that of that ~1.2million, ~700K shares were covered in chunks throughout the two week period. I dug further back into the SEC failed to deliver reports for GME and saw that pattern extending back months. It seemed almost as if the short positions were just being kicked down the road.
Having spent some time looking at the pattern, it's clear a large amount of failed to delivers come in, then a small chunk of coverage, then another large amount, and so on. To me this looked shady af so I looking into reasons that could cause that and discovered this article: https://www.sec.gov/about/offices/ocie/options-trading-risk-alert.pdf
In it, a specific section is eerily similar to what we've experienced with GME:
"Assuming that XYZ (e.g. GME) is a hard to borrow security (e.g. apes holding strong), and that Trader A (Melvin), or its broker-dealer, is unable (apes again) to borrow shares to make delivery on the short sale of actual shares, the short sale may result in a fail to deliver position at Trader A’s clearing firm. Rather than paying the borrowing fee on the shares to make delivery, or unwinding the position by purchasing the shares in the market, Trader A might next enter into a trade that gives the appearance of satisfying the broker-dealer’s close-out requirement, but in reality allows Trader A to maintain its short position without ever delivering on the short sale. Most often, this is done through the use of a buy-write trade, but may also be done as a married put and may incorporate the use of short term FLEX options. These trades are commonly referred to as “reset transactions,” in that they have the effect of resetting the time that the broker-dealer must purchase or borrow the stock to close-out a fail. The transactions could be designed solely to give the appearance of delivering the shares, when in reality the trader has no intention of meeting his delivery obligations. Such transactions were alleged by the Commission to be sham transactions in recent enforcement cases. Such transactions between traders or any market participants have also been found to constitute a violation of a clearing firm’s responsibility to close out a failure to deliver."
It's almost like a play by play of what we've seen (in combination with the ladder attacks). My guess is we'll find out more when the failed to deliver report for the second half of Jan comes out on the 17th.
I 100% think that Melvin is committing massive securities fraud. In fact, I would bet all my money on it - oh wait, I did 96 GME @ 290.
I am now holding on principle to see these fucks fail.
viac112
Melvin and gang hasn't covered shit. They've been illegally "closing out" their short positions and if we hold they will 100% get fucked. There is far more nefarious shit at play.
So this morning I saw the S3 and Ortex data both report significant covering of short positions for GME. This absolutely threw me for a loop because Friday morning they reported above ~120% short interest still. I could not for the life of me figure out how someone could close >50% of short positions on such a tightly held stock in ONE day with very little trading volume in the week. This got me digging around to figure out what's up.
I started by looking into GME failed to delivers (i.e. short sellers not able to cover their position on a stock) for the first half of January and I was shocked to find that just in the first 15 days of Jan, GME had ~1.2 MILLION failed to delivers. This is before most of wsb or mainstream began buying.
What was interesting though, is that of that ~1.2million, ~700K shares were covered in chunks throughout the two week period. I dug further back into the SEC failed to deliver reports for GME and saw that pattern extending back months. It seemed almost as if the short positions were just being kicked down the road.
Having spent some time looking at the pattern, it's clear a large amount of failed to delivers come in, then a small chunk of coverage, then another large amount, and so on. To me this looked shady af so I looking into reasons that could cause that and discovered this article: https://www.sec.gov/about/offices/ocie/options-trading-risk-alert.pdf
In it, a specific section is eerily similar to what we've experienced with GME:
"Assuming that XYZ (e.g. GME) is a hard to borrow security (e.g. apes holding strong), and that Trader A (Melvin), or its broker-dealer, is unable (apes again) to borrow shares to make delivery on the short sale of actual shares, the short sale may result in a fail to deliver position at Trader A’s clearing firm. Rather than paying the borrowing fee on the shares to make delivery, or unwinding the position by purchasing the shares in the market, Trader A might next enter into a trade that gives the appearance of satisfying the broker-dealer’s close-out requirement, but in reality allows Trader A to maintain its short position without ever delivering on the short sale. Most often, this is done through the use of a buy-write trade, but may also be done as a married put and may incorporate the use of short term FLEX options. These trades are commonly referred to as “reset transactions,” in that they have the effect of resetting the time that the broker-dealer must purchase or borrow the stock to close-out a fail. The transactions could be designed solely to give the appearance of delivering the shares, when in reality the trader has no intention of meeting his delivery obligations. Such transactions were alleged by the Commission to be sham transactions in recent enforcement cases. Such transactions between traders or any market participants have also been found to constitute a violation of a clearing firm’s responsibility to close out a failure to deliver."
It's almost like a play by play of what we've seen (in combination with the ladder attacks). My guess is we'll find out more when the failed to deliver report for the second half of Jan comes out on the 17th.
I 100% think that Melvin is committing massive securities fraud. In fact, I would bet all my money on it - oh wait, I did 96 GME @ 290.
I am now holding on principle to see these fucks fail.
