Tag: GME Margin Call

Are Hedge Funds About To Get Margin Called by JP Morgan?

JP Morgan Margin Call AMC
JP Morgan Margin Call

According to RISK.net JP Morgan warns hedge funds of intraday margin calls. This sounds very similar to proposal 002. The U.S bank may demand margins up to “7 times per day” according to sources.

The tough love comes from the fear of losing money and covering hedge fund positions like global banks did with Archegos Capital earlier this year. It seems like they’ve started to notice a pattern here.

As always, I’ll give you my take on what this means for us retail investors and how it plays into AMC’s short squeeze news.

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Ladies and gentlemen banks have had enough. They’re tired of getting screwed over by hedge funds overleveraging their short positions. When hedge funds cannot cover the entire hit, brokers have to cover the rest.

JP Morgan is trying to prevent from becoming like one of the affected brokers that suffered significant losses due to Archegos shorting Viacom and Discovery earlier this year.

Although the SEC might be oblivious to what’s going on, this bank sure isn’t. And if you remember, Charles Schwab has also raised margin requirements for short sellers shorting both AMC and GME stock.

Archegos meltdown resulted in billion dollar losses for global banks

Archegos JP Morgan

Banks to massive losses due to Archegos Capital overleveraging their positions in highly shorted stock such as Viacom and Discovery.

Wells Fargo was one of the banks that did not suffer any losses. “We had a prime brokerage relationship with Archegos,” the bank said. “We were well collateralized at all times over the last week and no longer have any exposure.”

According the Reuters, Morgan Stanley lost nearly $1 billion dollars from the collapse of Archegos. Other banks hit were Credit Suisse Group and Nomura Holdings which were affected the most.

Global banks were expected to lose between $5-$10 billion dollars according JP Morgan. And now it seems JP Morgan is taking the precautions necessary to avoid enormous losses too. By issuing intraday margins, they make sure short sellers have enough cash at hand as collateral. This could possibly be the catalyst for what we’ve been waiting for.

If margin accounts cannot keep up with the daily demand for new cash in its accounts, JP Morgan may instantaneously close out overleveraged positions. This will cause AMC stock to soar.

Hedge funds and family offices are affected

Archegos was technically a family office managing billions in assets, not a hedge fund. Well now JP Morgan is demanding both hedge funds and family offices post more cash during the day if their trades loses value.

The news was provided to Risk.net by three people who are familiar with the matter. No further information aside from these intraday margin requirements were relayed by the publication.

If JP Morgan sees too much risk within some accounts, and they will, they have the power to liquidate margin accounts short selling both AMC and GME stock. The results would drive these stocks high enough to force all shorts out of their positions.

Managing margin call news expectations

It’s important for the community to take into consideration that most news regarding margin calls have merely been neutral, so far.

If this JP Morgan margin call news plays in our favor then excellent! We could very well begin seeing some short covering. But if it doesn’t, another catalyst will end up squeezing shorts out of their positions. This may be a new wave of volume or other brokers who do not want to risk their investments through these overleveraged hedge funds.

However, positive news like this should feed your conviction. When you’re in need of strength, borrow mine.

I personally believe were getting closer to this chapter coming to an end as hedge funds continue to face serious scrutiny. Think about this for a second, the cards are against them.

Retail investors, banks, whales, and the public are all against them. I’m interested to know your thoughts, leave me a comment below. Are you ready for this short squeeze? And when do you personally think this will liftoff?


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Charles Schwab Raises Margin Requirements For AMC & GME Stock

Charles Schwab raises margin requirements for AMC and GME stock
Charles Schwab Margin Calls – AMC & GME Stock

Charles Schwab has raised margin requirements for short sellers shorting AMC and GME stock. The broker is adjusting 100% margin requirements for AMC on all long positions, and 200% on short term positions.

As for GameStop, the margin requirement is 100% on all long positions and a whopping 300% on short term positions. Community, this is massive. It’s the time we’ve all been waiting for. Lets go over what all of this means.

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I want to start out by giving a shout out to one of my Discord members by the name of Over Watch for sharing these details within our community. You’re the real MVP brother.

Resurfacing important news

It seems the Reddit crowd has brought to my attention that this raised requirement occurred some time ago. However, this is the updated and most recent version of the margin policy. With that being said, I’m glad my subcommunity was able to bring it to light and into the knowledge data base of even more people.

Apes need to know just how big this is. Both AMC and GameStop are in critical condition for massive gamma squeezes followed by the MOASS (mother of all short squeezes).

These two plays are way too risky for short sellers to continue shorting right now. Charles Schwab is now raising margin requirements for investors betting against the stock. So what exactly does this all mean?

It’s end game baby. Short sellers are getting margin called if they cannot meet their margin requirements.

How does this affect Citadel?

Citadel is paying for order flow from more than 9 online brokerage firms. Two of which are Charles Schwab and TD Ameritrade. This is not just for short sellers shorting these two stocks. This margin raise affects hedgies too.

What is 100% margin requirement?

AMC margin requirements Charles Schwab
AMC Margin Call – Charles Schwab

A 100% margin requirement is when a broker, such as Charles Schwab, requires the short seller with a margin account to have the funds available to cover the exact amount being exercised.

In other words, if a short seller is going to be shorting AMC or GME for a specific amount, they must have the capital available in their account to cover their positions.

This essentially creates collateral for the broker. 100% margin requirement will be required if short sellers are going long on AMC or GME. This means playing this game for over a year. Ouch…

What is 200% and 300% margin requirement?

GME margin requirements Charles Schwab
GME Margin Call – Charles Schwab

This is where it gets interesting. Margin accounts required to maintain a 200% or 300% margin requirements will need to have 2 to 3 times the capital in their accounts of the securities being exercised.

Hedge funds exercising millions of short shares in both AMC and GME are required to have 2 to 3 times the capital to cover their positions in their margin accounts.

This is insane if you ask me. Most margin requirements tend to be within 30%-50%.

What happens if margin requirements cannot be met?

If margin requirements cannot be met, then the broker (Charles Schwab) can close out as many positions needed to meet the minimum margin requirement.

This means Charles Schwab can forcefully liquidate short sellers accounts if they do not have enough cash at hand. And as we all know, hedge funds have been losing billions of dollars all year.

Margin calls are finally here

Margin calls are here and it’s only a matter of time before we begin to see AMC skyrocket due to shorts getting squeezed out of their positions.

The AMC and GameStop community have been waiting a long time for this. It looks like a short squeeze is finally going to be coming to fruition.

AMC and GME shareholders have been holding their positions since January of 2021. The community has been able to uncover the manipulation that occurs in the stock market as well as learn from one another about the markets.

Are short sellers still able to short AMC and GME stock?

According to Charles Schwab, short sellers are still able to short, naked short, and opt for put options as long as they have the funds available to cover the entire amount to be exercised.

It is strange however that short sellers are allowed to sell naked shorts with AMC stock but are prohibited to do so with GME stock. I wonder if this is due to GameStop moving to the Russel 1000 large cap.

Regardless, it’s going to cost short sellers so much more money now to keep their short positions open. Even if they continue to hold, they cannot hold forever. Not unless they want to live on the streets that is.

Charles Schwab margin call update

“Due to recent market activity, we’ve adjusted margin requirements on certain securities. Please note, neither Charles Schwab & Co. nor TD Ameritrade halted clients from buying any stocks, or selling any stocks they own, and neither firm restricted executing any basic options strategies.”

All of this information can be found on Charles Schwab’s margin page.

Prepare for massive AMC and GME gains

Community, there you have it. Retail investors are winning this fight against corruption and fraudulence. Continue to be patient. The seeds you planted months ago are about to sprout the biggest tree with the most delicious fruit you’ve ever tasted.

Remember to keep your emotions in check as both AMC and GME begin to squeeze. Write down your affirmations and goals, and start planning your exit strategy.

If you’re a new retail investor congrats, you’ve made it just in time. And if you’re wondering whether it’s too late to get in on AMC stock, the next following days to weeks should tell.

Stay updated on Discord

Stay updated on AMC with Frank Nez. I created this Discord group for new and seasoned apes to share DD, knowledge, and overall have a great hangout spot. Retail investors are learning something new here every day.

Here’s a personal invitation to our safe community. Be sure to share this post on your socials so other apes see this. Keep everyone informed and congrats on taking the risk. I’m already celebrating your success.

Also, leave me a comment below and let me know what this squeeze will mean for you. Everyone has a very personal and amazing story to share. I want to hear yours.

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