Tag: r/wallstreetbets (Page 1 of 9)

Citadel Has a Long History of Market Manipulation

Citadel Market Manipulation
Market News: Citadel and friends are entering the crypto space | Ken Griffin.

Ken Griffin and friends are entering the crypto world very soon — investors are concerned as Citadel has a history of several violations and fines.

EDX Markets plans to bring ‘traditional finance’ to the crypto space, a not so ‘traditional’ space to begin with.

The exchange made up of Citadel, Sequoia, Paradigm, Virtu, Charles Schwab, and Fidelity is debuting in November.

EDX Markets will start trading a limited number of spot, crypto tokens starting with a November trial period, with the official launch in January, per Bloomberg.

Similar to trading equities and options, EDX will allow investors to buy and sell digital assets through their existing broker dealer, rather than an outside venue or directly through a crypto-native exchange. 

“We’re taking some of the best features of traditional finance and bringing it to the digital markets to make it more efficient, and bring that cost saving to investors,” Nazarali said.

Nazarali is the former global head of business development at Citadel Securities.

But as many are aware, these financial institutions have a long history of playing unfair.

Will these sharks taint the crypto space too?

Let’s look at Citadel’s market manipulation history as well as other Citadel violations and fines in the past.

Franknez.com

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!

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

Receive weekly market news and articles like this to stay up to date.

Citadel Market Manipulation

Citadel Fines and market manipulation.
Citadel violation and fines – market manipulation.

2015

In 2015, an account operated in China by the brokerage arm of US hedge fund Citadel was suspended.

It was the latest casualty of regulators’ hunt for market manipulators and short sellers at the time.

The China Securities Regulatory Commission said that the Shanghai and Shenzhen stock exchanges had suspended 24 accounts as part of a probe into high-frequency trading.

The investigation focused on a practice known as “spoofing” in which an investor submits a buy or sell order but then withdraws it before a sale is completed — a practice that can mislead investors by creating the false impression that a stock is trading at a particular price.

Citadel confirmed that one of its accounts managed by Guosen Futures was among those suspended.

2017

SEC Citadel

In 2017 Citadel was fined by the SEC $22.6 million to settle charges of misleading conduct.

The hedge fund misled customers about the way it priced trades.

The SEC found that between 2007 and 2010, Citadel used two algorithms to execute stock trades on customers’ behalf that gave investors a worse price for their trades, even when Citadel knew better prices existed elsewhere.

“This affected millions of retail orders,” said Stephanie Avakian, the acting director of enforcement at the SEC at the time.

Citadel neither admitted nor denied the findings.

2021

Citadel violations and fines.
Citadel violations and fines – market manipulation.

In 2021, Failure-to-Delivers (FTDs) rose dramatically in the period leading up to January 28th, 2021, a phenomenon consistent with increasing short interest by market makers such as Citadel Securities.

FTDs are indictive of naked short selling, which occurs when a short seller does not actually possess the security it is supposed to borrow.

This practice is largely inaccessible to individual investors but accessible to market makers.

At the time, Citadel, Robinhood, and others restricted retail investors from buying ‘meme stocks’ in order to prevent escalating institutional losses.

Citadel eventually lost billions after betting against AMC Entertainment in 2021.

But the entire system needs a refresh – The DTCC waived a total of $9.7 billion of collateral deposit requirements on January 28, 2021, saving brokers, and screwing up retail investors.

2022

The Chicago Tribune published a piece explaining exactly what retail investors have been warning the SEC about.

Citadel Securities’ dark pool dominates a big part of the financial world, accounting for as much as half of U.S. stock market activity.

The Chicago Tribune says this prominent dark pool is run by Chicago Billionaire Ken Griffin’s Citadel Securities and has been targeting small scale retail investors.

And they’re not wrong.

Dark pools are typically involved in payment for order flow (PFOF), where they pay broker firms to receive retail order flow.

Brokers such as Robinhood and TD Ameritrade accept payment for order flow.

But retail investors have been bringing these nefarious practices in the market to light.

Related: Biotech Company Suing Citadel Over Market Manipulation

Leave a comment below

Leave your thoughts in the comment section below.

Be sure to join my newsletter for more market news and updates.

You Can Follow Me On: Twitter | Facebook | Instagram


Support your favorite blog for only $4/mo.

Your support helps maintain all the costs it takes to run a blog at this scale.

The mission of this platform is to spread the truth majority of corporate media isn’t willing to, by giving the people in our community a voice.

Your dedicated support keeps this platform going and growing.

Thank you for being a reader.

– Frank Nez


Is AMC Stock A Buy Or Is It Too Late?

is AMC a good stock to buy? Is it too late to buy AMC Entertainment stock?
Is AMC a good stock to buy? Is it too late to buy AMC Entertainment stock?

If you’ve been following the stock market news you’ve probably heard of all the hype surrounding AMC stock and GME (GameStop).

It wasn’t long before traders flocked over to AMC after the massive gains GameStop yielded due to the high percentage of shorting within the stocks.

Shorting a stock is the process by which sellers essentially bet on the stock price to drop.

They borrow stocks at higher cost, sell it, and buy back the stock low, profiting the difference.

Well, investors over at r/wallstreetbets found that by purchasing stocks at low price in heavy volumes it would drive a short squeeze.

A short squeeze occurs when a stock jumps sharply higher, forcing short sellers to buy higher, causing them to lose money.

Lots of it.

franknez.com

Welcome to Franknez.com – the blog where you can digest content on personal finance, stocks, crypto, and other trending investing news.

Let’s get started!

Will we see a squeeze with AMC?

AMC Entertainment short Squeeze

There are numerous news that lead traders and investors alike to predict an upcoming short squeeze like we saw with GME (Gamestop).

  • CEO of AMC announces AMC is no longer going bankrupt (via. Los Angeles Times)
  • Vanguard, Wells Fargo, BMO Harris, BlackRock, Fidelity and many more institutions are buying AMC stock while it’s low (via. CNN Business)
  • AMC is heavily shorted, with more than 22% short interest.
  • AMC is also currently one of the most held stocks surpassing Apple (AAPL) and Tesla (TSLA) (via. Nasdaq)
  • More publicity and awareness has average people investing in AMC which is driving volume for a potential squeeze
Related: 93% of AMC Shareholders Say They're Holding This Year

Retail investors keep buying AMC stock

We’re seeing retail investors continue to invest in AMC stock while it’s affordable.

And because it’s affordable, we’re also seeing average people invest in this stock.

As long as the stock is being held, though lows and through highs, a squeeze like we saw with GME (GameStop) is certainly possible.

AMC stock closed at $6.08 on February 2nd.

The stock has been on discount.

However, the community sentiment remains bullish meaning retail investors keep buying and holding the stock to squeeze shorts from their positions.

Shorts continue to short ladder the stock causing the downtrend we’ve been seeing for over two years now.

But AMC wants to keep climbing.

As long as AMC shareholders continue to hold and buy the dip, short investors are at a disadvantage.

Great news for AMC Entertainment (Archive Data)

News from 2021 helped drive AMC stock prices up momentarily when AMC Entertainment announcement that most AMC theaters had begun to reopen.

AMC’s cost to borrow the stock today is 213%.

The fee is going up after being down for many months.

What is AMC cost to borrow?

AMC short borrow fee
Franknez.com

The cost to borrow fee is the interest shorts pay for borrowing shares of AMC stock.

This means shorts are losing money every day by not closing their positions.

A surging short borrow fee rate could incentivize shorts to close their positions due to higher borrowing costs.

Why does the cost to borrow rate matter?

It costs shorts interest to hold while it costs the retail investor absolutely nothing to hold.

Shorts are losing money month they hold because of this interest fee for borrowing the stock.

For some reason shorts still think AMC Entertainment can go bankrupt, although they have enough money to continue doing business.. I know, I don’t understand this either.

As hedge funds like Citadel lose money, the short borrow fee only increases those losses.

AMC’s share price might be on discount right now, but hedge funds are experiencing losses on top of losses.

They’ll eventually have to close their short positions; will you miss it?

How high can AMC stock go up to?

AMC to the moon

Because we’ve seen a lot of suppression in the market, many traders are anticipating AMC stock can get as high if not higher than GME (GameStop).

This of course is just speculation as both stocks are heavily shorted and more people and institutions alike are buying and holding the stocks.

There’s a notion that all these suppressed gains may result in a massive short squeeze at any moment.

There are AMC short squeeze price predictions ranging from $100 to $1,000, and higher.

Related: How Big Could an AMC Short Squeeze Potential Surge?

So, is it too late to purchase AMC stock?

The price after a short squeeze eventually fall back down and level out, but this will take time.

AMC seems to have bottomed out and begin to bounce back after its incredible climb to $72 per share more than a year ago.

Despite what corporate media is pushing, AMC’s growth tells us the stock is undervalued.

But most importantly, there are plenty of short sellers that have yet to close their positions.

Hedge funds continue to short AMC and the volume is increasing; it’s the perfect storm for a short squeeze.

Trending: Analyst Predicts AMC Free Cash Flow Coming in 2024

Things to expect in the market with AMC

  • Volatility followed with an upward trend in price action
  • Short-ladder attacks
  • Headlines advising you to trade in something else
  • Hedge funds to lose a lot of money
  • More retail investors buying this stock right now
  • A series of gamma squeezes
  • And, a highly potential short squeeze that can happen at any time
Related: Are Institutions Preparing to Close Short Positions in AMC?

How many AMC shares should I buy?

If you’re planning on taking a position in AMC Entertainment set a budget for investing.

Since the market is volatile at the moment, purchase shares incrementally.

The best time to buy a stock is when the share price has dipped.

This will allow your investment to see gains when the stock price rises again.

Ladies and gentlemen, the last thing you want to do is to invest more than you can handle to lose.

This advisory must be made.

If you’re holding AMC stock leave a comment below and let me know what a short squeeze would mean for you.

Related: How to Buy AMC Stock (2023 Guide)


Where can I invest in AMC? What’s a good platform?

If you have not opened a brokerage account to begin investing, read how to invest in the stock market (step by step).

While the US investors over at r/wallstreetbets use Robinhood, it’s not available if you live in Canada.

Instead, you can use WealthSimple Trade or InteractiveBrokers

In this post you will see a number of linked platforms that you can check out!

I personally use Vanguard.

Vanguard has proven to be useful, and it has never failed me before.

Brokerage account Vanguard
AMC

Important Advisory

It is important to note that I am not a licensed financial advisor.

Like many traders and self-taught investors, all speculation is based on educated estimations based on highly reliable analysis, patterns, and documented news charts.

On another note: It would be wise to not invest more than you can afford to lose. In other words, invest money you would be okay with losing for simpler terms.

Avoid bogus headlines from The Motley Fool and other sources

AMC and r/wallstreetbets have been given lots of negative press from the likes of The Motley Fool and other sources; shaming the purchase of the stock.

The fool vs AMC

Fortunately, the AMC community has been backed up by Mark Cuban, Chance the Rapper, and other big names.

Influential outlets with powerful hedge fund partners (institutions who short the stock) have been attacking traders and investors by providing false information wherever they can.

What we’re seeing right now is that the big guys are losing money due to the price of shorted stocks going up.

They will say and do whatever they can to divert the public from trading this stock.

My personal suggestion to you is to not let these sources intimidate you.

Do your research to see how the stock price has been manipulated through bogus headlines and short-ladder attacks.

Not to mention, the complete halt of trading AMC stock by Robinhood.

Market News Published Daily

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.

When Do Shorts Have to Close Their Positions in AMC?

When will shorts close their short positions in AMC? When will shorts cover AMC?
When will shorts close their positions in AMC? When will shorts cover AMC?

Every retail investor holding a position in AMC wants to know, when will shorts close their positions?

And I don’t blame you.

This one is a little tricky.

See, it’s like saying, “when will retail investors sell their positions?”

franknez.com

Welcome to Franknez.com – the blog that fights for you, the retail investor. Today I want to discuss shorts closing.

Let’s get started!

Retail investors have been waiting patiently for AMC Entertainment stock to rip.

You’ve been holding through the ups and downs and even buying the dips.

And although we did see AMC’s share price surge in 2021, the short sellers are still here in 2023.

So, why aren’t shorts closing their positions yet?

What do retail investors need to do to squeeze hedge funds out of their money?

Let’s discuss it.

Are shorts obligated to close their positions?

When do shorts have to close their positions in AMC?

Let’s start with the fundamental question.

Are shorts obligated to close their positions?

Now, there are currently no rules regarding how long a short can hold before closing out their position.

However, lenders do have the right to demand the seller closes their position with minimal notice.

This is rare and only occurs if the the seller isn’t paying the interest fee, or the interest fee is ridiculously high.

“A short position may be maintained as long as the investor is able to honor the margin requirements and pay the required interest and the broker lending the shares allows them to be borrowed.” – Investopedia

When an interest fee is extremely high, it makes a stock difficult to borrow which obligates the short seller to close their positions.

Short sellers are burning big money to keep these positions open in 2023 though.

You’ll want to keep an eye on this interest as it will determine just how much shorts are bleeding.

I update AMC’s short interest data (and others) here daily.

Why does the “Cost to Borrow” fee matter?

The cost to borrow fee is an interest that short sellers must pay for borrowing AMC shares to short the company stock.

These fees are currently at an all-time high.

AMC short borrow fee interest

Short sellers will hold in hopes to drive AMC’s share price right back down to the floor.

However, AMC is trending upwards now and has absolutely no intention of going back down.

Analysts data and AI predictions all point towards a high possibility of a short squeeze.

Even Fintel’s short squeeze score has been as high as 80-90% in recent weeks.

AMC Short squeeze Score Fintel

This short borrow fee is going to continue to go up as AMC stock becomes harder to borrow.

For short sellers, a low short borrow fee is in their favor.

Hedge funds much rather pay the fee and stubbornly continue to hold their positions against retail investors.

But, if the short borrow fee is high enough to hurt the borrower, they will be more inclined to close their positions before losing an excruciating amount of money.

Just In: Short Sellers Are Down $81 Billion This Year

How can retail investors help drive the short borrow fee up?

Retail investors have helped drive the short borrow fee up simply by holding their positions.

When AMC squeezes, not every short will close their positions immediately.

This means retail investors won’t ever be able to time the high.

There will be short sellers who will continue to short even as share prices rise.

If we begin to see AMC’s price action rise monumentally, it is important to have a plan on how to take profits.

Just like a day trade, investors may be profitable for some time until they see gains turn into losses, which usually occurs due to greed in the markets.

This is what you want to avoid.

Important advisory: I am not a licensed financial advisory. I simply have a passion for finance and writing.

What happens when a short close their position?

A short position will be profitable if it is closed at a lower price than the initial transaction; it is at a loss if it is closed at a higher price.

In AMC’s case, shorts who drove began to short around $5 but are still holding to-date are at a loss.

AMC is currently trading around $6.08 per share as of 2/2.

When there’s a ton of shorts closing (in a particular stock), it will result in a short squeeze.

What is a short squeeze?

What is a short squeeze?

A short squeeze occurs when a stock spikes in price action due to an increase of short-sellers closing out their positions.

We’ve seen a short squeeze happen with both GameStop and Volkswagen. GME topped almost $500 while Volkswagen spiked shy below $1,000 back in 2008.

Some short sellers closed in June of 2021 when AMC shares rose to $72 per share as well.

AMC’s price skyrockets to more than +3,000% that year!

Short squeezes are massively profitable for retail investors.

These phenomena are how people are able to accumulate wealth in such little time.

Read: 5 Big Signs Pointing to An AMC Short Squeeze

So, when will AMC shorts close?

When do shorts have to close their position?
When will shorts close their short positions in AMC? When will shorts cover AMC?

Instead of exiting, short sellers have been holding.

Just as retail investors have high conviction on massive price action, hedge funds still have conviction on shorting the company to delist it.

But AMC Entertainment isn’t going bankrupt and AMC shareholders aren’t leaving.

AMC said bankruptcy was no longer on the table years ago and some Wall Street analysts have said the industry is on a solid path to resurgence, via Hollywood Reporter.

In fact, the short thesis is beginning to change with many incredible developments happening in the movie theatre industry.

AMC Entertainment (NYSE:AMC) is up more than 54% this year-to-date and it looks like the stock has bottomed out.

As we continue to see a high utilization and the short borrow fee increase, we can only expect shorts may be incentivized to close sooner than later.

Will AMC’s price action continue to go up?

AMC stock has always had high demand from shareholders.

While many of these retail activists continue to hold losses from June’s drop, it’s possible this changes – granted that short sellers close out their positions this year.

Short sellers will have the option to hold their loses on paper for months to come (with fees) or close their position at the current share prices.

Short selling is a risky business and bulls have sent a message – “we’re not leaving”.

With new titles coming to AMC movie theaters as well as new developments, we’re only going to continue to see a surge in price action due to an increase in the company’s fundamental growth.

Even if shorts continue to hold, lenders will eventually run up the interest rate again, forcing them to throw in the towel.

Leave a comment below and let the community know what a short squeeze would mean for you.

Market News Published Daily

Market News Today - When do shorts have to close their positions in AMC?
Market News Today – When do shorts have to close their positions in AMC?

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


« Older posts

© 2023 Franknez.com

Theme by Anders NorenUp ↑