Tag: AMC Margin Call (Page 1 of 3)

How Do Hedge Funds Manipulate The Stock Market?

how do hedge funds manipulate the stock market.
Market News: How hedge funds manipulate the stock market.

Hedge funds have been manipulating the stock market for decades.

But it wasn’t until now that a community has risen to raise awareness of market injustices.

The shorting of both AMC and GameStop stock have uncovered a number of nefarious strategies used against retail investors.

What is the SEC doing to regulate these financial entities?

We’re here to find out.

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Let’s get started!

Overleveraging Borrowed Shares

Hedge funds have an incredible supply of short shares available to borrow.

This advantage has allowed them to manipulate a stock’s share price by initiating short-ladder attacks.

While supply and demand are pushing a stock’s price up, hedge funds short the stock using an insane amount of leverage.

This predatorial strategy has yet to be announced as illegal nor has it been addressed by the SEC.

Off Exchange Trading

Hedge funds and market makers are getting away with being able to trade and swap stock in foreign exchanges where the stock’s price isn’t required to be disclosed.

They’re taking retail orders and, in a way, manipulating the circulating supply by not reporting accurate transactions.

We’ve seen this happen with Barclays.

Stock market manipulation
Barclays CEO, Jes Staley – Hedge fund manipulation

Reports by Finra have been made public detailing multiple fines on Barclays for inaccurate books and records.

Barclays is one of Citadel’s clearing houses.

Off exchange trading where transactions aren’t displayed on the list market such as the NYSE is a massive problem the SEC is still trying to figure out.

Though the SEC is trying to implement the D-Limit order that will allow stocks to trade under IEX, they’re having trouble from hedge funds and market makers.

Citadel has sued the SEC on this matter, we have yet to receive a public update on the case.

Related: 95% of Retail Orders Don’t Go Through the Lit Exchange

Naked Shorting

AMC and GameStop have had an incredible amount of FTDs, or failure-to-delivers.

These are orders that have not been executed in options, and are usually a result of a ‘short party’ not owning or not having all of the underlying asset.

This has led retail investors to the educated assessment that synthetic shares are floating in the market; shares known as naked shares used to short a stock.

According to Investopedia, “Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems.”

Naked shorting has gone mainstream with CNBC’s Melissa Lee and Fox Business’s Charles Payne bringing light to this predatorial practice in the market.

Retail investors must use their voice to address these issues to the SEC.

Related: GTII Pursues Legal Action Against Naked Shorts

The Use of Mainstream Media Outlets

According to The Fool, you should invest in this or that “instead”.

We’ve seen the headlines countless times.

The Motley Fool is a source that provides its subscribers with hand-picked stocks with potential gains.

With tremendous respect, stick to what you do.

The integrity of this company is to help investors pick winning stocks, not to divert them from a stock due to its potential upside that can cause hedge fund partners to lose billions of dollars.

And that’s exactly what happened.

No matter how many times mainstream media outlets tried to divert retail investors from buying AMC stock, it cost hedge funds a lot of money all year.

And at the same time, a lot of retail investors have a lot of unrealized gains.

This ladies and gentlemen is how the media has tried to manipulate the performance of a stock.

This influence can sway a new retail investor from adding to the surging volume of shares being purchased in the market.

To the new retail investor – make your financial decisions based on your own due diligence.

Not on what media sources get paid to write about.

Yahoo Finance & InvestorPlace

Platforms such as Yahoo Finance & InvestorPlace have also had their fair share of negative headlines to try and divert the public from skyrocketing AMC to the moon.

With InvestorPlace even throwing a jab at GME investors saying, “If You’ve Made Money On GameStop, You’re Not An Investing Genius”.

Perhaps not, but I’m pretty certain these investors are wealthier than the person who came up with that punchline.

These media sources have been discouraging new retail investors from investing in AMC since the beginning of the year although the stock is up year-to-date!

Manipulation In the Stock Market

robinhood stock market manipulation
Robing Hood? Stock market manipulation

I’m sure you’ve all heard of the Robinhood scandal.

This is another form of manipulation in the stock market caused by the halt of buying power.

Robinhood prevented its users from buying stocks such as AMC and GME (GameStop) during GME’s bull run.

Although restrictions aren’t as tight anymore, we’re beginning to see trusted and beloved companies get exposed as hedge funds worst nightmares become a reality.

Today we’re seeing more people learn about how the stock market moves.

If more of the public is to understand how hedge funds pose a risk to our economy and businesses, we must expose these financial institutions for who they really are.

Read: Why new retail investors investing in AMC should avoid Robinhood

A House of Cards, r/superstonks (Reddit Post)

A Redditor just posted an insane amount of DD on Reddit.

This long form post discusses the transition from paper filled orders in the stock market to the use of computers going tracing back to the mid 80s.

The post reveals the beginning of issuing naked shares.

We’re also learning that a lot of transaction are being held by the actual institutions that are shorting these stocks.

Robinhood routes more than half of it’s customers to Citadel.

This information has now been disclosed via the Washington Post.

You can read the full Reddit post here.

Trey’s Trades does a quick breakdown on this DD as well.

The video is embedded for your viewing pleasure.

It costs retail investors nothing to hold, but it costs shorts and hedge funds money every day.

It’s only a matter of time before a squeeze occurs, no matter how manipulated the stock market gets.

Related: Citadel loses billions: Hedge funds are getting dragged down

Franknez.com fights The Fool, Yahoo Finance, and InvestorPlace

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Franknez.com is fighting for the community against malpractice from all news media shunning AMC, GameStop, and other retail favorites.

This platform will serve as a positive media outlet for the community and only spread factual documentation, and news related cited-sources.

I will not encourage retail investors to take a position in any stock.

However, I will outline the facts and evidence to help you make your own personal financial decision.

How can retail investors bring awareness to the community?

Retail investors can expose false information on social media to shine light on manipulation tactics driven by hedge fund partners.

Sharing factual and positive articles relating to the performance or analytics of a particular stock is another way the investing community can stay united.

Franknez.com is a platform for the community.

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Shareholders Are Preparing for An AMC Short Squeeze

AMC Short Squeeze
Stock Market News: AMC’s high short interest and borrow fee indicate a short squeeze is near.

Shareholders are preparing for an AMC short squeeze as the stock continues to trend upwards and break new levels of resistance.

The movie theatre stock is up +18.40% on the month and up more than +37% in the past week.

Volume has steadily increased and even surpassed the average trading volume of 30 million.

AMC shareholders are speculating big moves may be underway as the rising price triggers short sellers to close out their positions.

AMC’s current short interest is still high at 19.76% per Fintel.

This means there is plenty of shorting in the stock for retail to trigger another massive price move like they did in January but more specifically in June of 2021 when the stock soared to $72 per share.

AMC short interest today

The company has performed well considering it almost faced bankruptcy early last year.

AMC Entertainment has beat quarterly earnings since 2021, striking confidence for an AMC short squeeze in 2022.

And the cost to borrow short shares has also skyrocketed in recent times.

Borrowers are now paying a whopping 66.4% to short the stock!

This is big news.

Let’s discuss it more below.

AMC Short Interest Today

According to Fintel, AMC’s short interest today is sitting at a high 19.76%.

AMC shot up to $72 per share last year when the stock was heavily shorted around 20% short interest.

AMC’s short interest came down to approximately 14% when it had reached its all-time high of $72.

The stock’s price may have come down a long way, but shorting has increased since and so has the short interest.

But AMC is seeing a slight bounce as it rejects the major level of support around $6 per share, currently trading between $7.50 and $8.

Heavy buying pressure is all the movie theatre stock needs to begin following previous trends back up to $9, $14, and $20+ levels.

If retail investors are able to successfully trigger this event, a short squeeze is inevitable.

What makes AMC more interesting now than ever is how high short sellers are paying to borrow the stock compared to earlier this year.

Stonk-O-Tracker is reporting a whopping 66.40% short borrow fee rate.

AMC Short borrow fee rate

This is the annual fee it is now costing hedge funds to short the recovering movie theatre chain.

Liquidation across the markets could explain the obligation to keep up with such a high fee.

But that’s not all, AMC’s short borrow fee rate was as high as 77.80% on Wednesday.

The question is, how long will hedge funds be able to keep up with these losses as retail investors continue to buy and hold AMC stock?

FUD Grows but the Community Still Stands

stock market news and updates - AMC
Join the newsletter below for more stock market news and updates.

There are many doom prophets infiltrating the retail community urging investors to sell their AMC shares.

Claiming that AMC is dead, and it will never squeeze.

Now more than ever, short sellers opposing heavy retail volume are trying to scare shareholders out of their money.

But the AMC community is still standing strong.

Is an AMC short squeeze happening soon?

The probability of retail investors squeezing shorts again is not a far-fetched idea.

We could begin to see bigger price action very soon.

Join the newsletter for more market news and stock updates.

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Report: AMC FTDs Spiked to $9.9 Million in October

Market News: AMC FTDs top $9.9 Million for the month of October.
Market News: AMC FTDs top $9.9 Million for the month of October.

The latest report on AMC FTDs shows failure-to-delivers spiked to $9,906,536 for the month of October so far, with data still coming in.

This is equivalent to 1,640,155 FTDs.

FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.

These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.

In the case of sellers, it means not having the goods to meet that transaction.

Failure-to-deliver can occur in options trading or when selling short naked, per Investopedia.

AMC Entertainment has been a big target for short sellers looking to profit from the demise of the century old movie theatre chain.

Let’s discuss it.

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Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

Let’s dive right into it!

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AMC Gets Hammered by Clearing Houses

AMC FTDs - AMC Failure to deliver
AMC FTDs – Stocksera AMC Failure to Deliver.

According to Investopedia, AMC FTDs can occur if there is a technical problem in the settlement process carried out by the respective parties (clearing houses).

Seeing as Citadel Clearing LLC transacts orders worldwide, there’s a major conflict of interest here.

Ken Griffin’s Citadel LLC is short on AMC Entertainment stock, so there’s a very distinct connection here.

It’s unlikely FTDs have been a result of retail buyers since the majority are purchasing the equity on cash accounts where orders execute almost immediately.

Naked short selling seems to be the most probable cause here as $AMC has tumbled despite heavy retail interest.

So far, it seems like the SEC isn’t willing to tackle FTDs in both AMC and APE.

In fact, Gary Gensler says there’s a possibility that naked shorting isn’t even involved.

But I’m curious to know your thoughts on this.

Leave a comment down below.

You Can Follow Me On: Twitter | Facebook | Instagram

Also Read: Credit Suisse Warns Investors of Naked Short Covering


What Are Dark Pools in Stock Trading? (AMC)

What are dark pools in the stock market?
AMC Dark Pool

Dark pools are somewhat of a mystery to new retail investors. We hear about them a lot within the AMC community, especially through Trey’s Trades. We know that they allow hedge funds to make undocumented trades behind doors.

So what exactly are dark pools? And, is something being done about them? I want to expose this subject today.

franknez.com dark pool amc

Welcome to Franknez.com – the blog that protects retail investors from FUD media. Today we’re discussing dark pools.

Lets get started!

What is a dark pool?

A dark pool is basically a financial forum or platform for trading stocks or other securities. Dark pools are privately organized and are known to be an alternative trading system.

These ATS’s are seldomly regulated.

The concerns regarding dark pools and AMC Entertainment has been that we simply don’t know what these communities are hiding from the SEC. This slimy strategy is what’s known as backdoor buying and selling.

Why are dark pools used?

Dark pools give hedge funds an advantage in the sense that they are able to conceal their moves. We can only speculate what type of information is being hid from the public here. Details within these dark pools are not accessible by the trading public.

This lack of transparency may allow dark pools to conceal information such as:

  • The illicit activity of naked shorting
  • Explanations behind millions of fails-to-delivers
  • Any discussion regarding malpractice in the market
  • Inaccurate filings and reports

Dark pools can very well be the place where short sellers get together to discuss strategies and the ruining of companies.

It could be the reason why we don’t know how many short sellers are shorting ‘meme stocks’ and other information that would otherwise prove a fair market for both institutions and retail investors.

Is the SEC looking into dark pools?

SEC dark pools gary gensler

In a recent article regarding the high possibilities of automated margin calls, I point out some research I found on Gary Gensler, Chairman of the SEC.

He publicly announces that the SEC has been observing hedge fund activities since January and are taking action to regulate these entities shorting AMC and other ‘meme stocks’.

One of Gary’s proposals states that hedge funds could face 13-F filings. These filings would provide the SEC with insight on equity as well as dark pool disclosure.

I trust we will begin to see this new chairman make the right calls. It’s time for change and our generation will be the ones to make it happen.

Dark pools could explain the low short borrow fee

Could dark pools be the explanation as to why the short borrow fee is so low for hedge funds shorting AMC and GameStop? Now, because so much information is in the shadows, this of course is only speculation.

According to Investopedia, dark pools can charge lower fees than exchanges because they are often housed within a large firm and not necessarily a bank.

dark pools Investopedia
via. Investopedia

Why do these large firms (hedge funds) have this much power in the first place? This advantage is completely deceitful and unruly. It really does make you look at the SEC and think why in the world has no one taken action sooner.

Are dark pools illegal?

Dark pools are not illegal but they are certainly unethical. Per the SEC, we can expect real regulation to surround these exchanges relatively soon.

Bloomberg Tradebook

bloomberg tradebook dark pool SEC

The Bloomberg Tradebook is a dark pool that is owned by Bloomberg LP. Bloomberg is a financial media company that has been trashing AMC Entertainment for quite some time now.

Bloomberg has published FUD (fear, uncertainty, and doubt) articles in efforts to scare people out of their money. This raises questions regarding the ethics of these manipulators who gather behind close doors in order to stray the public from squeezing shorts out of their positions.

Other dark pool exchanges

Institutions such as Morgan Stanley and Goldman Sachs also offer private trading to their clients through the use of dark pools.

The main concern here is that the information that is made public to the SEC can easily be manipulated. Mainly to conceal foul play and inaccurate information.

The information that is available on Stonk-O-Tracker regarding AMC and dark pools is the percentage of trading within these forums/exchanges; which is usually relatively high.

How does this affect AMC stock?

AMC stock

These private exchanges may be illegally trading naked shares behind close doors refraining AMC’s stock price from further climbing. Although AMC is up nearly 3000% year-to-date, hedge funds continue to attack it through sell walls and short ladder attacks.

And since these private forums could potentially have been getting away with inaccurate reports, the possibility of foul play in the market is certainly there.

AMC Dark Pool Trading

Andrew Hiesinger, CEO of Quant Data took to Twitter to expose AMC’s current dark pool trading volume.

Quant Data provides retail investors with real-time options order flow, alerts, dark pool prints & levels, and news. There has been approximately 34 million shares exchanged in dark pools just in today’s trading day (8/18).

This equates to $1,268,475,800.46 in notional value, says Andrew.

Andrew Hiesinger AMC Dark Pool Data

64.21% of trading in dark pools won’t allow AMC’s stock price to reflect the actual price action. This primarily because this amount of trading is done behind closed doors where buy orders aren’t being reported.

This form of manipulation is clouding AMC’s real share price. #DarkPoolAbuse has been trending on Twitter.

Bookmark this article for updated news on dark pool abuse in AMC.

How can retail investors fight these predatory trading practices?

Retail investors have several advantages over hedge funds shorting AMC and other ‘meme stocks’. The community must stay the course if they are to squeeze these short sellers out of their positions.

Not only are hedge funds losing billions, but the SEC has finally begun to implement new regulations that could automate margin calls in overleveraged accounts. I’m personally not worried. These house of cards are falling at the times they should.

Read: 6 things retail investors holding AMC stock should know

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