Tag: Margin Call

Hedge Funds Face Short Sale Disclosure From The SEC

October 10, 2021 / / 4 Comments
Short Sale Disclosure
Short Sale Disclosure is big news for retail investors

In today’s market news, the SEC is imposing a new rule that would force money managers to periodically disclose short sale reports.

Hedge funds have already begun to retaliate against the rule as it would give away their ‘trading strategies‘. But hedge funds have also been overleveraging their positions in plays such as AMC and GameStop.

How will this rule make an impact on both these short squeeze plays? I want to discuss why this is very positive news for AMC, GameStop, and other ‘meme stocks’.

franknez.com

Welcome to Franknez.com – I think it’s safe to say most of you have no faith in the SEC. However, I feel like it’s important for us to intentionally look towards regulators to create real change. We cannot be loud and in the end expect nothing out of it. If we’re going to be loud, expect change to be the result of your efforts. Demand it.

Let’s get started!

Gears Have Begun To Move

Why does change take long? Change usually requires a specific amount of energy to begin manifesting in present time.

The energy it takes to change the color of your living room walls will take more time than the energy that is needed to change a lightbulb in your restroom.

Apes have been asking for massive change; monumental change in the markets.

The change we yearn does not happen with a flick of a switch. The change we’re looking to make will affect millions upon millions of people, even after our stories here on earth are done.

For a movement to make history, massive amounts of action and energy are required. Hence the length of real change to become present.

The community has made itself known to real entities with legal power to make change happen. I’ve been saying it for months now, your voice is a powerful weapon against the corruption in this world.

And because of your boldness and your courage, the gears towards monumental change in the markets have begun to move.

What Does Short Sale Disclosure Mean?

A short sale disclosure would allow the SEC to have full disclosure of the amount of shares that hedge funds are borrowing from other institutions to short stocks in the market.

Here’s where it gets interesting.

We know that hedge funds have been overleveraging their positions through phantom shares, or naked shares (non-existent), due to failure-to-deliver data, dark pool trading percentage, and anomalies in intraday charts that push the price down regardless of buyers outweighing sellers.

A short sale disclosure would mean hedge funds by law will be required to show regulators the powerplant behind the curtains if they are to continue these type of operations.

And hedge funds are nervous. We’ve seen hedge funds beg the OCC to delay liquidation, and are now seeing pushback regarding this new short sale disclosure rule.

Short Sale Disclosure Could Eliminate Naked Shorting In The Markets

At least theoretically right? Hedge funds are able to report information to regulators that essentially lands on a ‘safe zone’ type of filing.

Often times market manipulation is overlooked due to the misinformation that is being reported.

A short sale disclosure puts immense pressure on hedge funds. It could prevent them from engaging in illegal shorting strategies.

Failing to do so could open the possibility to regulators suspending these strategies in general. I don’t doubt that in the fight for a fair market this could become a reality.

A short sale disclosure could be seen as a type of audit to monitor hedge fund activities. The anomalies in the market have gotten the attention of Gary Gensler, chairman of the SEC.

And as I mentioned earlier, it takes a lot of energy and time to get the gears moving.

The short sale disclosure rule could be proposed by November next month, via Bloomberg intel.

Community, this is very optimistic news. We can’t keep attacking the very people who can actually impose regulations on this powerful adversary.

We are a very intelligent community. Let’s not self-sabotage our opportunity to make a real and positive impact in the markets.

Could Short Sale Disclosure Trigger Margin Calls?

If buying power is exceeded, or overleveraged, it’s possible hedge funds could face margin calls. Margin requirements could be raised and accounts may get liquidated depending on the short sale disclosure information.

It may sound simple but know that the markets are far from simple. Hedge funds will not go down without a fight.

But if you’ve seen Ken Griffin recently, it looks like the boss battle is almost over.

How Will This New Rule Affect ‘Meme Stocks’?

Take away massive shorting in the markets and you’ll get the real picture of what a real supply and demand market looks like.

If you analyze the technical chart data of AMC and GameStop you’ll find that the price moves down when it should not be moving down.

You cannot compare how massive buyers are compared to sellers in both these plays, yet we see the price of these stocks get driven down when supply and demand should be narrating a different story.

Hedge funds have been manipulating AMC and GameStop’s price action to benefit financial institutions in a market that’s better-tailored for one player.

This is why the SEC is also implementing the Market Structure Modernization rule. Market plumbing has drawn big attention from politicians, investors, and regulators alike.

The SEC will be targeting PFOF and the market dominance of financial firms, including Robinhood and Citadel Securities.

This would be massive! Retail investors do not trust Citadel to process their securities.

Eliminating the flow of transactions to this financial firm could mean a massive difference in FTDs, and even dark pool trading!

However, this rule could come by April. Change takes time.

Here’s Why An AMC Rebound Is Right Around The Corner

I published this article explaining why I believe AMC will rebound soon. The data has to do with short interest and volume patterns.

A lot of you have shared this article recently and I actually appreciate you for doing so.

I know all too well what it feels like to just want this play to simply pop. Every single one of us has this in common.

Time is on our side, don’t forget to enjoy the present.

franknez.com

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Ken Griffin Lied About Robinhood Communication During Halts

September 29, 2021 / / 13 Comments
Ken Griffin Lied About GameStop Halts
Ken Griffin Lied About Halts

#KenGriffinLied is trending number 1 on Twitter right now. A document was just released showing messages between Vlad and Robinhood COO, Gretchen Howard, in regards to Citadel making demands on limiting PFOF (Payment For Order Flow) back in January.

The conversation then shows Vlad stating, “maybe this could be a good time for me to chat with Ken Griffin”.

Ken Griffin lied under oath by stating Citadel had no communication with Robinhood in regards to the halts on AMC and GameStop back in January.

Hedge funds have since been overleveraging their short positions while manipulating AMC and GameStop’s stock price through the illicit use of naked shorting and dark pool trading.

Retail investors are now looking at regulators to take serious action.

Franknez.com

Welcome to Franknez.com – I’ve said it before and I’ll say it again. You are creating change this very moment. Lets discuss what we need to do to end this market manipulation once and for all.

Lets get started!

Will The SEC Protect Retail Investors From Market Manipulation?

But before I do, if you don’t know who Ken Griffin is, he’s the CEO to the Citadel Securities. This is the hedge fund who’s been betting against AMC and GameStop for months now.

Citadel is what you get if our government’s power was not divided into three branches. See, the problem here is Citadel LLC is a hedge fund, Citadel Securities is a market maker, and Citadel Connect is a dark pool.

You essentially have a tyrant making all the rules for themselves.

Now, many of you have been tagging the SEC, Gary Gensler, and even Potus on Twitter. Now it’s time for the community to see what measures are taken by our government leaders to protect its people.

In the transcript above, you can see the initial conversation between Gretchen (Robinhood COO), and Vlad Tenev (Robinhood CEO). Shortly after we see another transcript confirming the communication between Robinhood and Citadel..

Kenneth Griffin Lied about halts

Jim Swartwout is the President and CEO of Robinhood Securities. In the transcript above he states, “you wouldn’t believe the convo we had with Citadel, total mess.”

And get this, after 9 months of silence on Twitter, Citadel has gone on to lie again stating this is conspiracy theory. Although the transcripts show evidence in plain ol’ English.

The community is fighting for change. Citadel has yet to address their abuse of power through naked shorting and the usage of dark pools to mask bullish moves in the market.

Citadel’s Ken Griffin Lies Under Oath

Ken Griffin Lies Under Oath

Here is the footage of Ken Griffin lying about his team having any communication with Robinhood during the halts back in January.

The cat is out of the bag! Community, we must continue to fight for our rights for a fair market. The SEC has the power to liquidate these overleveraged hedge funds from their positions.

We must demand it. Only then will AMC and GME squeeze. This play, it’s your birthright.

Fox Business On Ken Griffin

In a recent interview with Trey’s Trades, Charles Payne and Trey discuss the matter.

Charles pull up some information confirming about 60% of AMC was traded through dark pools to which he asks Trey if it’s possible AMC’s share price potential could be higher if it did not trade through dark pools.

And of course the answer is that both AMC and GameStop could reach higher potentials if the market was being run based on supply and demand without any dark pool manipulation.

Ken Griffin Lied FOX BUSINESS

My favorite line is when Charles says, “diamonds are created over a long period of time though a whole lot of heat and a whole lot of pressure, are the apes up for it”.

This is why I’ve grown to really like Charles Payne. He’s using his platform to fight corruption in the markets.

Charles Payne has given apes the mainstream platform we need and I’m glad Trey is the ape in our community to pass the message.

Time To Get Loud

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This is the moment we’ve all been waiting for. Will you fight for what’s yours? Share this article with the community, tag our government leaders. It’s time for the MOASS.

#LiquidateShortSellers #KenGriffinLied

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Original publication date: 9/27/2021

Revision date: 9/29/2021

How Soon Will Hedge Funds Get Margin Called? (AMC)

July 30, 2021 /
How soon will hedge funds get margin called?
When will hedge funds get margin called? #AMCsqueeze #AMCstock

Retail investors all want to know. How soon will hedge funds get margin called? I’m going to be updating this article with new information as it becomes available so be sure to bookmark it.

If you’re investing in AMC or GameStop, this article will prove to be of value to you. You’ve done an outstanding job. You’ve bought the rips and dips but most importantly, you’ve held.

Lets go over the data that is currently available regarding margin calls and hedge funds. There are some incredible things happening behind the scenes that you need to know.

franknez.com

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

I want to give a massive thank you to my readers. A lot of you have just recently started following me and I’m very grateful for your support. I love seeing the community sharing FrankNez content on social media. It brings me great pleasure to know I’m providing value in your daily lives.

What is a margin call?

I published a piece fully dedicated to what a margin call is in the stock market world some time ago. In short, a margin call occurs when the value of an investors brokerage account falls below the broker’s required amount. This is when a broker demands that an investor deposits additional money into their account so that it meets the minimum requirement.

A margin call is usually an indicator that a security (asset) held in the margin account has decreased in value. When a margin call occurs, the investor must either add funds to their account or liquidate (sell) some of their assets in that account.

Why does a margin call occur?

  • It may occur when an account runs low on funds usually as a result of a losing trade
  • A margin call occurs when a demand for additional capital is required to meet the minimum margin requirement
  • Brokers may force traders to sell assets, no matter the current market price, in order to meet the margin requirement if the trader does not deposit the funds

If you’re a new retail investor and have recently joined the ape community then you’ve more than likely heard the term margin call before. A margin call is basically a 50/50% chance a short squeeze may occur on the spot.

However, even if hedge funds are able to keep enough capital in their margin accounts to keep them afloat, at some point they’ll have to cave in. Hedge funds are losing billions of dollars and this game is only costing them more money each day that passes.

Bloomberg News on Gary Gensler / Margin Calls

Margin call hedge funds

In this video, Bloomberg News discusses Gary Gensler, the new SEC chairman’s concerns of overleveraging and manipulation in the stock market.

This five minute video is important to log because it demonstrates and acknowledges the concerns in the market. Perhaps the SEC was incompetent in the past to say the least. But it looks like we might be looking at some change here community.

And although this particular video was published on May 6th, below are some things Gary Gensler is already proposing in order to protect retail investors and the overall market in general.

SR-NCSS-2021-002

SR-NSCC-2021-002 AMC automatic margin calls

This proposal from the SEC is massive if it gets approved. The SEC has heard you and they’ve been looking into hedge funds overleveraging their positions in AMC stock and other ‘meme stocks’.

This proposal would allow an automatic margin call system to margin call hedge funds with overleveraged accounts. This margin call system will essentially target short sellers on a daily basis and identify whether they are required to raise margin minimums or liquidate their positions.

SR-NSCC-2021-002 APPROVED 6/21/2021

SR-NSCC-2021-002 APPROVED margin calls
SR-NSCC-2021-002 Approved

Community, proposal 002 has been approved. These regulations have been placed in effect. However, as long as short sellers are able to keep up with their margin requirements then this regulation is rather neutral. A lot of these rules being put into place play in our favor the more money short sellers lose.

Total Return Swap AMC

The SEC and FINRA have gotten together to review the activity of ongoing overleveraging in the stock market. Hedge funds could soon face total return swaps per Gary Gensler, SEC chairman.

In a total return swap, the payer (hedge fund) must pay the interest on the underlying assets, plus any appreciation in the market value of the asset. This sounds a lot like shorts paying all short borrow fee owed on top of the market value of naked shares they’ve traded.

13-F filings and short selling disclosures

There’s a strong possibility that hedge funds also face 13-F filings. This filing will provide the SEC with insight on equity and dark pool disclosure.

Everything now seems to be falling right into place despite the continuous short laddering.

When will hedge funds get margin called?

Charles Schwab has recently raised margin requirements for both AMC and GME stock. This means that if they are unable to keep the minimum cash required in their margin accounts, they’ll be required to liquidate some or all of their positions!

This would create massive price action to trend in an upwards position. We know that short sellers are losing millions of dollars every day. Ladies and gentlemen. This is simply a waiting game. The point is going to come where they can no longer afford to be negative each day.

This movement is about to get on a whole other level of excitement. The fundamentals to this AMC short squeeze have not changed. All retail investors will have to do is hold until short sellers cave in and close their positions willingly, or brokers margin call them.

BREAKING NEWS: Charles Schwab raises margins on short sellers shorting AMC and GME stock

Charles Schwab raises margin requirements

Charles Schwab raises margin requirements

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.

All this essentially means is that short sellers will be required to have more cash at hand as collateral. So not only are hedge funds losing a lot of money every day but are now being required to put enough cash into their accounts to cover their entire positions if need be!

You know what happens if they can’t cover right? That’s right, margin call. Instant liquidation of their accounts resulting in the MOASS we’ve all been waiting for.

Margin calls will result in a short squeeze

At first we might experience what’s known as consecutive gamma squeezes. These are usually triggered by high volume in the market due to expiring call options in the money or very high purchasing days.

As more short sellers and hedge funds with larger short positions in AMC stock begin to cover, we will begin to experience the beginning of a short squeeze.

A short squeeze could last several days to several weeks. During this timeframe, the stocks price will continue to skyrocket as more short positions are closed.

It really does feel like we’re coming to an end here. This new beginning is going to change millions of people’s lives and I’m glad to be that first person to congratulate you.

NSCC-2021-010

Proposition NSCC-2021-010 allows the NSCC to act as a third party lender to oversee every transaction between lenders. It prevents short sellers from using naked shorting strategies and from creating FTDs.

This is one of the biggest AMC news yet regarding the stock. The NSCC is also requiring that short sellers have more cash at hand to limit overleveraging their positions.

This proposal can go into effect at any time but may take a few weeks in case something needs to be revised. Once approved, AMC stock will surge past $40 leading back to higher levels of support.

When should I exit my position in AMC?

I wrote an AMC exit strategy guide to help the community make a strategized decision on how to sell when AMC squeezes.

I do want to relay that this is only my take on it. Many of you already have your own exit strategies, I understand this. Regardless, it’s there if you need it and would like insight from a different perspective.

And lastly . . .

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If you gained value from this article be sure to share it with the rest of the community. Thank you to everyone publishing this information on Facebook, Twitter, Reddit, and Discord groups.

If you would like to support the blog you can do so on Patreon where you will also be able to access exclusive Frank Nez content.

And remember, this article will be updated as more information is revealed to the public so be sure to bookmark this page for your convenience.

Read: Here’s why people are buying AMC stock: Investors guide

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

July 14, 2021 /
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.

franknez.com

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

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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AMC Margin Call: The Squeeze is Inevitable

July 2, 2021 /
AMC Margin Call: The squeeze is inevitable Franknez.com

Not investing in the stock market yet? Click here to learn how!

Lives are about to change for the new and seasoned holder in AMC stock. With a surge of retail investors in the stock, the SEC is finally cracking down on hedge funds. AMC community, you were loud and they heard you. Here’s why I think there’s an AMC margin call right around the corner.

franknez.com

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

I recently published an article exposing the ‘lobbied SEC’. The lack of regulation on short positions in AMC has been ignored for too long. Many of you shared this post on Twitter and used the hashtag #SECdoyourjob. I’m confident they saw YOU. So thank you for standing up for change because you got their attention.

Everything is falling right into place for AMC Entertainment stock

everything is falling into place for AMC entertainment stock

Hedge funds betting against this stock are destined to lose. Here’s why:

  • AMC’s fundamentals are no longer fragile. Retail investors and institutions alike are buying the stock. AMC Entertainment is experiencing a surge in sales revenue now that the movie theater franchise is open.
  • Shorts betting against the stock have bitten more than they can chew by continuously shorting AMC stock through the use of synthetic shares.
  • Regulators are now taking the necessary precautions to ensure they don’t lose money as hedge funds continue betting against a soaring and bullish stock.

Retail investors now have the higher floor. The CEO of AMC Entertainment is in touch with his shareholders. Celebrities such as Chance the Rapper have publicly announced the opportunity of this investment. And more people are learning how to invest in the stock market through the platforms such as Franknez.com and other subreddit communities.

Wanna know what hedge funds have? Absolutely no respect nor support.

ICC-2021-007 proposal gets APPROVED

ICC-2021-007 proposal SEC AMC

This is huge news for retail investors holding AMC. This document is 9 pages long but I’ve done the DD to help you understand what this proposal means for AMC and how it can trigger a short squeeze.

Approved on 5/18

Many retail investors have been curious as to what this proposal means and why it’s such great news for AMC. This article is going to provide you with a quick rundown of this new proposal and will be updated as new margin call news begin to develop.

1. Flexibility on margin requirements

This proposal provides brokers with flexibility on margin requirements for institutions (hedge funds) maintaining a position in risky plays, such as a short position in AMC.

If brokers feel a short position is too risky then they can raise the amount of equity required in an account.

2. Regulators request collateral

The proposal ensures regulators have some sort of collateral from all the shorting that’s been occurring. Regulators want to make sure that hedge funds have enough cash reserves to meet their minimum equity requirement

Risk management is the biggest takeaway from this proposal.

Related: How high can AMC stock price skyrocket up to?

Margin calls everywhere

Regulators are going to start raising margins depending on how risky the plays are for certain institutions. Their purpose is to limit the amount of leverage hedge funds are able to use. The ICC does not want to be responsible for closing out closing hedge funds’ positions.

This is where we can begin to see shorts cover their positions. If an accounts updated margin exceeds the accounts capital, the broker can either margin call them (cover some risk) or completely liquidate their positions until the margin no longer exceeds the capital.

Overleveraged accounts could get margin called

Margin call

Now, because hedge funds shorting AMC are betting against a bullish stock that only knows up, shorting the stock at the moment is ultra risky. Regulators are going to start demanding higher margin requirements as collateral.

Short sellers are sitting on nearly $1 billion dollars in loses, via REUTERS. A margin call usually occurs when an investment suffers enough losses that the investors margin account goes below a certain amount.

If hedge funds shorting AMC fail to meet a margin call requirement then the broker can begin liquidating their assets without notice. Regulators will only step in to liquidate accounts if hedge funds continue to take a nosedive in loses.

Furthermore, hedge funds are drowning every day retail investors hold the stock.

Expect a surge in price action and volatility

Retail investors can expect a surge in price action in AMC as well as volatility. Hedge funds are still borrowing shares to short the stock meaning they have ammo in their arsenal to drive the price down during upticks.

Shorts are going to begin covering their positions as the stock continues to skyrocket and as margin requirements are increased. A short squeeze is inevitable. Retail investors need to hold, stay the course, and be patient.

BREAKING NEWS: Charles Schwab margin calls short sellers shorting both AMC and GME stock

Citadel buys AMC stock

Citadel buys AMC stock

Citadel just recently bought AMC stock leaving many retail investors curious behind their motive.

Will they try to reduce their loses through a debit and credit scenario where they’re forced to close their positions but also break even from a squeeze?

Or is their motive to sell and disrupt AMC’s short squeeze? Citadel’s motives will become clear as this squeeze begins to unfold.

Why do I think Citadel is going long on AMC?

The entire market is crashing. These institutions are beginning to deleverage. Pretty soon there’s going to be margin calls liquidating accounts left and right. I think Citadel bought AMC long in order to keep the stocks value. They know they’re losing and they know AMC is now a value play.

A margin call will ensure they have no money left so I personally think AMC is Citadels collateral, or emergency fund post squeeze.

Related: What is margin call in stocks? AMC saga

AMC margin call news

The purpose of this post was primarily to explain the ICC-2021-007 proposal in simple ape language for the community.

Be sure to bookmark this article as it will be a foundation to more AMC margin call news and updates.

Support the blog on Patreon.

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Charles Schwab Raises Margin Requirements For AMC & GME Stock

June 28, 2021 /
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.

Franknez.com

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

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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Feds Hunt For $720 Billion Dollars From Reverse Repo

June 23, 2021 /
fed reserve repo amc

Get mind blown. The feds are cutting off what could be the last lifeline institutions have for borrowing money. They’re hunting down a whopping $720 billion dollars from a reverse repo.

franknez.com AMC

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

What is a reverse repo?

A reverse repo is where feds receive money from institutions such as hedge funds or banks due to borrowed securities; usually due to cash flow issues. The reason an institution would borrow money from the feds is because they don’t have other cash reserves. When hedge funds borrow money from the fed it usually means it’s a last resort type of situation.

How does this connect with AMC?

Why is this is significant to AMC and the ape community? The feds need their money back, like now. This could explain all the selloffs in the markets. It seems like institutions have liquidated a lot of their positions in the both the stock and crypto markets in order to pay back the feds now.

If hedge funds and institutions don’t have enough capital left in their margin accounts then they’re going to be in some real deep waters. This could finally be the end of it my friends. Short sellers’ nightmares have truly become a reality. I hear margin calls baby. Lets dive in some more.

The Federal Reserve is stepping in

Fed Reverse Repo Chart
Fed Reverse Repo Chart

Right off the bat I want to point out that the Federal Reserve is collecting $720 billion back from institutions who borrowed the money. What’s insane is that this maturity, or expiration date is on NET15 from the issue date of Wednesday June 9th, 2021.

This means institutions who borrowed all this money have to pay it all back by June 24th. This could very well explain why the stock market as well as the crypto market have tanked recently. Institutions need cash ASAP.

It’s likely institutions such as hedge funds needed to liquidate their accounts in order to pay back the feds. I mean what else could have possibly caused the entire markets to tumble all at once?

If institutions were borrowing money from the fed as a last resort, what does this mean for hedge funds moving forward? Will hedge funds who borrowed money from a reverse repo be able to cover their minimum margin requirement? And if so at what costs?

Will hedge funds be able to pay back the feds?

Hedge funds borrow money from repos as leverage, betting that they’re going to make money from shorting stocks before they pay back the feds. Unfortunately for hedge funds, they’re suffering major losses and the feds want their money back.

Any institution that has been shorting AMC, GameStop and other ‘meme stocks’ will be paying back the feds at a loss. But it gets worse for short sellers.

Not only are they paying the feds interest, but they’ve also paid a short borrow fee interest all year to borrow stock. Hedge funds are getting hit with a storm of karma if you ask me.

According to Business Insider, hedge funds lost well over $6 billion dollars since the start of May alone and short sellers have lost another $5 billion dollars since the start of the year. Millions more are disintegrating by the day.

Hedge funds are having a terrible 2021 to say the very least. I said this many months back and I’ll say it again. They should have closed their positions when AMC’s stock price fell back down to $8-$14. But I guess ego is king right? Their year is about to get a whole lot worse.

Key Points

  • Reverse repo’s are when feds loan money to institutions having cash flow issues
  • Institutions have to pay back $720 billion dollars by June 24th
  • Hedge funds continue to lose millions to billions each day and are running out of lifelines
  • Short sellers could face margin calls very soon if they cannot meet minimum margin requirements

This is a very exciting time for retail investors. Something incredible is unfolding right before our very own eyes.

Not only is history being written, but justice will be served for the 2008 financial crisis. The average retail investor is about to make the trade of a lifetime.

Will AMC finally squeeze?

I personally think we’re about to start seeing gamma squeeze after gamma squeeze. This will primarily be due to the continued buying pressure from retail investors as well as institutions losing a lot of money, resulting in willingly closing out their positions. And if it’s not willingly then the significant loss of money could lead to immediate liquidation through margin calls.

Short sellers will cave in, they will lose. Whether it’s now or later it really doesn’t matter. But they will. Just like a short squeeze, their fate is inevitable.

AMC Stock – Feds are done with hedgies

Trey’s Trades – Fed reverse repo

I want to leave this video from Trey the man himself regarding this topic on the reverse repo. If you aren’t subscribed to Trey yet be sure to do so.

He’s a technical analyst that sparked this entire movement with AMC’s short squeeze. I have a tremendous respect for Trey and will always give credit where it’s due.

And lastly. . .

franknez.com

If you found this article to be of value be sure to share it with the rest of the community. Most hedge fund affiliate media platforms will not report the positive occurrences that play in the retail investors favor.

It is up to us to help new retail investors become aware of the situation at hand and all news related to AMC.

This is why I publish articles that support the AMC community and the cause to the absolute fullest. The public deserves to know this information and they deserve this chance 💯.

Related: What is margin call in stocks? AMC saga

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What is Margin Call in Stocks? AMC Saga

June 10, 2021 /
What is margin call in stocks? AMC stock
What is margin call in stocks? AMC stock

I’ve taken notice many new retail investors aren’t familiar with what a margin call is yet. This term is used a lot within the AMC community when referring to hedge funds.

I’m going to explain what a margin call is in simple ape language and further explain how this relates to hedge funds shorting AMC stock.

Franknez.com what is a margin call?

Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

I want to begin by saying thank you to the community who’s been reading and sharing my articles with new retail investors. You’ve been able to help out so many people and without you none of this possible.

What is a margin call?

A margin call occurs when the value of an investors brokerage account falls below the broker’s required amount. This is when a broker demands that an investor deposits additional money into their account so that it meets the minimum requirement.

A margin call is usually an indicator that a security (asset) held in the margin account has decreased in value. When a margin call occurs, the investor must either add funds to their account or liquidate (sell) some of their assets in that account.

Why does a margin call occur?

  • It may occur when an account runs low on funds usually as a result of a losing trade
  • A margin call occurs when a demand for additional capital is required to meet the minimum margin requirement
  • Brokers may force traders to sell assets, no matter the current market price, in order to meet the margin requirement if the trader does not deposit the funds

How does a margin call work for short sellers (hedge funds)?

Short sellers will always have a margin requirement because their practice involves selling a stock that is borrowed an not owned.

This means that short sellers will always be required to fund their accounts and meet the minimum margin requirement.

If the value of the position falls below the margin requirement, short sellers will be forced to close their positions or increase funds into their account.

Short sellers face major heat

Seeing as AMC has never been this high before, short sellers are more than likely already funding their accounts so they don’t fall below margin requirements. This means Kenny is taking money out of his pocket to keep his short position open in AMC and other so called ‘meme stocks’.

AMC’s highest share price was in the low to mid $30 dollar range back in 2016 before this squeeze play. This means hedge funds and short sellers have negative balances at the moment. Right now they’re feeding their accounts from their pockets.

Retail investors vs short sellers

Retail investors have the upper hand right now. Short sellers are losing a lot of money on paper, and in reality. It really is a game of who caves in first. The AMC community may continue to surge the share price as long as the stock is being bought and held.

Short sellers will be forced to put money from their pockets into their margin accounts or close out their entire position, so as long as the share price continues to keep them negative.

The result? A short squeeze.

When will short sellers be margin called?

Short sellers can be margin called at any given moment. I wouldn’t be surprised if some accounts were already margin called, forcing the investor to fund their account above the margin requirement.

How will we know when shorts begin to cover their positions in AMC?

AMC’s share price will be experiencing several gamma squeezes driving the price action up. These movements will be incremental and much smaller than an actual short squeeze. AMC’s short squeeze will be violent. Hedge funds with a lot of money can hold their positions much longer than individual investors short selling the stock.

When large institutions shorting AMC stock begin covering their positions, we’ll begin to experience the start of a short squeeze.

Retail investors participating in this once in a lifetime trade must continue to do what they’ve already known for months. The tide has turned and soon AMC’s short squeeze will begin to unfold.

Related: AMC margin call: The squeeze is inevitable

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