Tag: Margin Calls

AMC Short Sellers Suffer More Than $750 Million

AMC Short Sellers lose more than $750 million
Short sellers lose more than $750 million shorting AMC stock

AMC short sellers are facing massive losses.

Short sellers have lost more than $750 million in the past two weeks alone.

AMC is up more than 84% in the past five trading days closing up more than 44% today.

Should we expect more price surges this week?

Let’s break it down together.

franknez.com

Welcome to Franknez.com – Today AMC is experiencing a gamma squeeze. This is going to be an exciting week for shareholders.

Let’s dive right into it!

Join the newsletter to become part of an activist group fighting for market transparency!

Receive weekly market news to stay up to date.

AMC’s volume skyrockets past 200 million

AMC Stock

Last week AMC’s trading volume reached 130 million, a milestone we have not seen since last year prior to its runup to $72 per share.

Today AMC’s volume skyrocketed past 200 million.

A clear sign the stock is getting ready for higher price action.

In the midst of these runups, short sellers have lost more than $750 million dollars in the past two weeks alone.

And this is only so far as momentum will keep driving AMC forward.

AMC short sellers are about to experience greater losses if they continue to hold their positions.

History is about to repeat itself as AMC aims at reaching a new all-time high for 2022.

The question is how high will AMC go?

Has AMC’s short squeeze started?

AMC short squeeze
Is AMC squeezing?

AMC’s current reported short interest is 20.90%.

We will notice short covering in the market when this number figure begins to decline.

When AMC surged to $72 per share last year, we saw the short interest drop from 20% to 14%.

AMC short sellers jumped in again and the short interest has risen to almost 21% since.

As of today, AMC’s short interest has not changed.

We should have a better understanding whether AMC’s runup has been mere momentum from retail, or short covering in the next day or two.

I update AMC’s short interest data here daily so be sure to bookmark it.

You can subscribe to the blog or follow me on social media for regular updates.

What’s currently moving AMC’s price action may also be options that expired in the money last week.

I’d love to hear your thoughts in the comment section below on what you think.

How soon will AMC squeeze?

AMC Short Sellers

AMC had two main runup points.

One towards the end of January and another in May of 2021.

While both events managed to squeeze a few shorts from their positions, hedge funds continued to overleverage their positions.

Shareholders have held their stock to inevitably send AMC’s share price to unprecedented numbers by squeezing hedge funds out.

Financial institutions around the globe are facing liquidity issues.

These liquidity issues are forcing institutions to keep up with their margin requirements as margin calls are triggered.

While the market takes a dump due to hedge fund selloffs, heavily shorted stocks such as AMC and GameStop will trigger short sellers to close their positions.

AMC’s trading volume surpassed 200 million on Monday and the probability of it increasing in the coming days is very high.

At some point, shorting the stock won’t be worth if for short sellers, especially as the cost to borrow the stock soars.

AMC has increased its retail shareholder base from 3 million to 4 million in the past year.

More investors have uncovered the short interest data that shows AMC has the perfect short squeeze setup.

Whether MOASS is just around the corner, or this is merely another massive price runup, there’s no denying significant gains are on their way.

What do you think?

Leave your thoughts in the comment section below.

AMC short sellers are going to be in a lot of pain.

Will it be from gamma, or from MOASS?

Join the newsletter for more market news and updates.

You can follow me on: Twitter | Facebook | LinkedIn


Clearing Houses Could Face a Liquidity Crisis of Historic Proportions

Clearing houses could face a liquidity crisis
The stock market will mirror the commodity sector’s liquidity issue

The CFO of Trafigura just said clearing houses will collapse as “margin call doom loop” goes global.

Last week the commodities sector (oil, petroleum, metals and minerals) saw margin calls worth billions of dollars.

Trafigura Group is one of the world’s top oil and metal traders.

Trafigura has in recent weeks stepped up efforts to seek new funding from beyond its traditional group of bank lenders, according to people familiar with the matter. 

And no one is able to meet equity demands.

Let’s break it down together.

franknez.com

Welcome to Franknez.com – we’re seeing something very interesting unfold here as margin calls are triggered and short sellers brace for short squeezes.

Let’s dive right into it!

Join the newsletter to become part of an activist group fighting for market transparency!

Receive weekly market news to stay up to date.

“Margin call doom loop” goes global, Trafigura CFO warns

Trafigura CEO Margin Call Doom Loop
Clearing houses face liquidity issues – Trafigura CFO warns of ‘margin call doom loop’

Trafigura Group, one of the world’s top oil and metals traders, has been holding talks with private equity groups to secure additional financing as soaring prices trigger giant margin calls across the commodities industry.

The trader held talks with Blackstone Inc. for an investment of around $2 billion to $3 billion but those talks ended without a deal.

Trafigura has also approached Apollo Global Management Inc.BlackRock Inc. and KKR & Co.,.

The discussions have been based on raising funding due to several margin calls the commodity industry has been facing recently.

There’s no certainty any of the discussions will progress to a deal, they said. (Bloomberg)

These large companies facing margin calls are having a very big problem meeting demand.

Now, the increase in IM (initial margin) created demands on hedge funds and other investors.

Prepare for short squeezes

Studies have looked at the connection between margin calls and market stress, and most have focused on a margin call doom loop” in which higher margin requirements force fire sales into an already illiquid market.

This process then triggers more margin calls.

Financial institutions are going to be forced to sell assets, triggering short squeezes in heavily shorted stock.

The Dow Jones and NASDAQ are down today as ‘meme stocks’ are soaring.

AMC is up more than 24%, GME stock 11%, and HYMC more than 45%.

The price runups on AMC and GameStop shows us the stocks are merely getting warmed up.

We know this because of the short interest data (updated daily here).

As more market stress begins to settle, hedge funds will be required to keep up with their margin requirements or be forced to liquidate their positions.

clearing houses cash in margin

Globally, cash IM (in margin) is typically held by banks.

A bigger short squeeze than Nickel?

Nickel short squeeze

Analysts are expecting a bigger short squeeze than nickel to occur which soared more than 250%.

Although nickel is in the commodities sector, the financial system goes full circle.

The banks distribute cash and even bailout companies despite the industry.

“Expect much more commodity volatility, and many more multi-billion margin calls, until eventually the big one is triggered, one which leads to a near default not of the LME but of a far bigger clearinghouse.” ZeroHedge.

The liquidity issue in the commodity sector could threaten broader financial stability and create broad liquidity squeezes.

Trafigura’s chief financial officer warned that the spike in capital needed to keep commodities flowing around the world since Russia invaded Ukraine would squeeze smaller trading houses out of the market.

Bloomberg reported that trading houses have been seeking funds to maintain their physical and derivative positions as prices of everything from natural gas to metals soar.

Since commodities represent the basic building blocks of all products in an economy, the prices of commodities affect the operational costs of corporations.

This in turn affects prices in the stock market, further sparking margin calls in this sector.

What will happen as clearing houses require more liquidity?

Leave a comment below.

Stick around for more market news

franknez.com

Don’t forget to browse the blog for the latest market news and ‘momentum stock‘ articles using the drop-down menu.

Join the newsletter to be part of a large investor community fighting for a fair market!

You can follow me on: Twitter | Facebook | LinkedIn


Credit Suisse News: Margin Call Tension Rises in Global Markets

Credit Suisse Margin Call
Tensions rises – Credit Suisse News – Credit Suisse margin calls investors

Credit Suisse is triggering margin calls on clients that use Russian resources as collateral.

With Russian assets falling in value, it’s causing a domino effect that’s going to affect all global ties to Russia.

Margin calls are going to affect banks and financial institutions to close and liquidate their positions.

franknez.com

Welcome to Franknez.com – margin calls are on the horizon. And it’s going to tank the stock market even lower.

Let’s dive right into it!

Join the newsletter to receive weekly market news and updates.

Wealthy individuals face frozen accounts

wealthy individuals face frozen accounts

The invasion of Ukraine has left wealthy individuals invested in Russian assets with frozen accounts and demands for more collateral.

In a margin call, banks ask investors to add cash or securities to a portfolio that typically includes borrowed funds when the market value drops below margin requirement.

The bank can forcibly liquidate clients’ holdings if they are unable to deposit the funds.

Credit Suisse told PBI that its position in the matter remains unchanged.

“Credit Suisse serves its clients while complying with all applicable laws and regulations, including any sanctions from relevant authorities,” the firm said.

This isn’t affecting just Europeans; Credit Suisse is imposing margin calls in the U.S. too.

How is this affecting investors in the U.S.?

Getting rid of Russian assets is a big problem for hedge fund managers in the U.S.

Russia’s central bank retaliated by banning Russian brokers from selling securities held by foreigners.

Furthermore, Russian Prime Minister Mikhail Mishustin said the country will temporarily stop foreign investors from selling Russian assets.

Hedge funds in the U.S. holding Russian assets are in a big mess right now.

Margin call tension is causing liquidation in many areas of the market.

U.S. hedge funds will be forced to liquidate positions or hedge their plays, further overleveraging short positions.

Financial institutions in the U.S. exposed to Russia

Morgan Stanley - Credit Suisse AMC Margin Calls
Morgan Stanley – Credit Suisse AMC Margin Calls – Credit Suisse News Bloomberg

Citigroup disclosed in its annual report that it has nearly $10 billion in exposures to Russian counterparties, including loans, reverse repo agreements and cash deposits. 

Citigroup stock is down more than 11% year-to-date.

Morgan Stanley’s next gen emerging markets fund (MFMIX) has also been exposed to Russia.

Nearly $16.6 million is frozen due to Russian sanctions.

That’s 13.6% of the total net assets of $122 million in the fund.

Schwab’s fundamental emerging markets large company index ETF (FNDE) has also been affected.

Out of the $4.8 billion in assets, 12.7% have been exposed to the Russian stock market.

Related: Regulators are taking Morgan Stanley and hedge funds to court

Credit Suisse aids U.S. probe of rivals Morgan Stanley and Goldman Sachs

Hedge fund FBI raids
Morgan Stanly and others under investigation – Credit Suisse AMC relations? Credit Suisse News Bloomberg

Credit Suisse is trying to help the U.S. Department of Justice build a case to block trading against rivals Morgan Stanley and Goldman Sachs, REUTERS.

The bank delivered a presentation to the U.S attorney’s Office in New York flagging issues leading to the collapse of Archegos Capital.

Archegos Capital was a private family office, also known as unregulated hedge funds, that caused banks to lose billions of dollars.

Banks and hedge funds are currently under investigation by the Justice Department for illegal trading activities.

Two of these banks under investigation are Morgan Stanley and Goldman Sachs.

One hedge fund has been raided by the FBI for flooding the market with fake orders to drive the price of stocks down.

It comes as no surprise Credit Suisse is imposing margin calls on investors but also attacking its rivals.

Credit Suisse news Bloomberg

What does this mean for shareholders?

Leave your thoughts in the comment section below.

You can follow me on: Twitter | Facebook | YouTube | LinkedIn


SR 21-19: The Fed Is About to Impose Massive Margin Calls

SR 21-19 Margin Calls
SR 21-19 Margin Call Requirements

The Fed’s just published a letter under SR 21-19 to supervise and assess the actions that led to the Archegos default by examining financial institutions and their relationships to investment funds.

The Federal Reserve is issuing this guidance to limit risk management.

SR 21-19 is intended for banking organizations with large portfolios and relationships with investment funds, such as hedge funds.

Some of you in the community wanted me to explain what this letter means and so I’m going to be breaking it down for you today.

franknez.com

Welcome to Franknez.com – today’s market news has to do with the Fed’s cracking down on banks and hedge funds. Interesting things are happening at the end of the year, aren’t they?

Let’s get started!

Speaking of interesting things happening.

The ape community has attracted the attention of the SEC, mainstream media, and now the Federal Reserve.

It’s worth noting that progress is progress, no matter how slow or long it takes.

Why is SR 21-19 Significant?

SR 21-19 Margin Calls

This federal piece of document is significant for many reasons.

  1. It highlights lack of transparency in the markets.
  2. The letter acknowledges a relationship amongst financial entities and confirms strategic involvement.
  3. It expresses how overleveraging positions pose a major risk towards meeting debt obligations.
  4. And finally, SR 21-19 touches topic on providing proper margin terms to these institutions.

Reserve banks are being asked to distribute this letter to the supervised organizations in their districts and to appropriate supervisory staff.

The board is continuing to review firms’ weaknesses to take further action.

The Feds are looking for a solution that will mitigate risk and prevent hedge funds from defaulting, as seen with Archegos.

Archegos defaulted on March 26, 2021, causing over $10 billion in losses across several large banks.

Today we’re seeing Citadel has lost billions of dollars this year from shorting AMC stock.

The hedge fund has begun freezing any attempts for its clients to pull their investments out by issuing ultimatums that would make it impossible for the customer to return.

And on top of that, a hefty fee for withdrawing their investments.

New Margin Call Terms Are on The Horizon

franknez.com

It is unclear what the margin call terms will be for these overleveraged financial institutions.

However, the letter states that they will be ensuring that these institutions receive the appropriate margin requirements.

They will either avoid inflexible and risk-insensitive margin terms or extend close-out periods.

Risk-insensitive meaning appropriately raising the margin requirements dependent upon how overleveraged a financial institution is.

Hedge funds shorting AMC and GME stock have amounted an overwhelming number of borrowed shares to short the stocks.

Yet these stocks have remained leveled due to the strength of retail investors.

The feds are about to impose massive margin requirements on overleveraged hedge funds.

Now, we won’t know how long this process will take.

What we do know is that the federal government isn’t taking hedge funds lightly anymore.

And if the appropriate margin terms are too high for hedge funds to maintain, then they’ll be forced to close short positions.

Getting To the Bottom of Synthetic Shares

AMC Synthetic Shares

Will the feds come across the millions of synthetic shares these overleveraged hedge funds have created?

It will be a massive surprise if they don’t.

See, the feds are requiring their supervisors to receive adequate information to fully understand the risks of the investment funds they are investigating.

This includes positions and counterparty concentrations, or a specific sector in which two financial entities are specifically focused on.

Failing to meet transparency will mean the feds will take action on setting conservative terms between the parties.

Identifying synthetic shares in the market is a rabbit hole the feds themselves will have to go down.

My suggestion is for the community to push the Department of Justice to investigate these synthetics.

Raising awareness to these problems in the market is key to sparking a MOASS.

2022 Is Going to Be an Interesting Year for Hedge Funds

ken griffin meme

Hedge funds face more scrutiny than ever before in history.

They have created system risk and pose a threat to our businesses and economy.

Hedge funds never saw a community of activists fight them for a fair market.

Retail investors caused Archegos to default and Melvin Capital to lose billions of dollars resulting in a life-line from Citadel Securities.

Melvin Capital has stated that they’re out of the game.

However, financial institutions such as Citadel Securities and Bank of America Corp continue to short AMC stock.

With the feds now involved, 2022 is going to be an interesting year for both hedge funds and retail investors.

Leave Your Thoughts Below

franknez.com

What do you think of the SR 21-19 letter?

Could this federal document be the first step towards the uncovering of synthetics in the market?

Are we closer to margin calls than ever before?

Leave your thoughts below.

Twitter | Facebook | Instagram | YouTube | LinkedIn

For exclusive Frank Nez content visit the Patreon.


Year May End in Short Squeeze Cyclical Rallies Says Analyst

Short Squeeze News Marko Kolanovic
Short Squeeze News – Marko Kolanovic

JP Morgan Chief Global Analyst, Marko Kolanovic, is predicting we will transition into the new year with short squeeze cyclical rallies.

He indicates that short sellers will get squeezed soon due to aggressive shorting and resilient retail investors.

“Large short positions will likely need to be closed before January”, via Business Insider.

This news comes after the retail investor community in AMC and GameStop have been advising about overleveraged hedge funds all year.

GameStop is up 800% and AMC is up more than 1300% year-to-date.

While both stocks have recently come down, they are still heavily shorted with lots of room for growth with a short squeeze.

The ape community has been speaking of a ‘third phase’ where the next runup of both these stocks will reach new ATHs.

But some apes are skeptic.

Will this be a proper short squeeze?

franknez.com

Welcome to Franknez.com – if you’ve been reading the blog since early 2021 then you’ve probably made a ton of money. And if you’ve diamond handed AMC stock all year, it’s about to get a whole lot better.

Let’s get started!

Massive Moves Are on the Horizon

rocket ship

Mainstream media claimed the runup to $72 per share was AMC’s short squeeze.

Only it wasn’t a proper runup.

AMC has always had more potential due to how overleveraged short sellers are on the company.

The Ape community has held through losses and gains and bought every dip.

This resilience is why AMC stock is setup for another massive runup.

Only this runup will be much larger than the first and second.

TA (Technical Analysis) charts have shown AMC’s next runup could very well reach hundreds of dollars per share.

I’ve predicted AMC’s third runup will easily reach $200-$300 while other analysts in the community are predicting $400-$600 per share.

How high AMC’s price will go will depend on how much short covering actually occurs.

Even then, with millions of synthetics circulating the markets, there’s no question why retail investors are deeming the next runup a ‘fake short squeeze’.

What we do know however is that massive moves are coming up regardless of the label.

Can This Next Runup Trigger MOASS?

While it’s certainly possible the next runup could trigger MOASS, the feds are still investigating hedge funds.

And what’s a proper MOASS if synthetics aren’t fully taken accountability for and covered?

In this video I discuss my thoughts on the topic.

Subscribe to the channel for more content like this

The next runup will mean that every ape invested in AMC will be profitable.

That I’m certain of.

MOASS will occur when these phantom, synthetic shares have been closed.

While the community can put the information out there, it will ultimately be up to regulators to force financial institutions to cover these too.

Retail investors will have to continue fighting for proper market structure if a MOASS is to occur.

In the meantime, the community should keep an eye out on the short interest data.

While Ortex data is self-reported and could very well be higher, it’s the only tool retail investors currently have to measure some ‘squeeze potential’.

Get Excited for Big Moves

franknez.com

Regardless of if the media refers to these coming moves as a short squeeze, the community is going to be very profitable on paper.

What lies after these price runups will become clearer as this play continues to unfold.

Massive moves seem to be up ahead, know what you hold.

Twitter | Facebook | Instagram | YouTube | LinkedIn | Patreon

Read: Anchorage Capital closes after betting against AMC stock

Topic Discussion on YouTube with FrankNez

© 2022 Franknez.com

Theme by Anders NorenUp ↑

%d bloggers like this: