who changed what rules? margin call has existed as long as the financial system has. whether you are shorting or leveraged in anyway, you need to be able to show you can cover, if you don't you forfeit your position. when someone buys 100 shares of gamestop at 300 on robbinhood with RH gold, they are leveraged. ROBIN HOOD, is responsible to be able to cover that leverage, they could not, so they had to halt trading. if they don't halt trading then bye bye robinhood. Thats always been the rules, who changed what??
@@theperson3693 The DTCC changed the rules by changing the collateral for clearing from around 3% to 100%. They did this to protect the hedge funds because they knew that the funds wouldn't be able to cover and would be bankrupted. They knew that brokerages that don't have their own well capitalized clearing would not be able to cover the collateral and would have to stop the purchase of the stock. That is changing the rules to bail out the market predators at the expense of retail investors.
@@obiwanpierogi It's not corrupt at all. It's how the system should be. These WallStBets idiots need to be arrested and spend some time in prison, or worse. The genetic lineages of the real traders from hedge funds are strong, and consist of long line of rich and successful people, many close to royalty. These people were selected by evolution and natural selection to be successful and there's a reason they are. To allow the WallStBets people to just come into the system and make their own decisions is destructive and dangerous. It's going against the natural laws of the universe. These traders on reddit come from poor genetic lines that are not pure and contain many mistakes and very few successful and rich people. To act like they have any right to do this when they have zero family history of it is absurd. Allowing this is essentially reversing the survival of the fittest, and if you go against nature like that there will be consequences, likely a collapse of the entire system. If this is allowed to happen there would be death and destruction the likes of which we have never seen. And I think bringing back serfdom would be the solution, and might even be a solution at the moment for the people and families of those taking part in WallStBets, supporting them, or being exposed to the concept. If we don't quell it right now we will be going against evolution. You can't just go against the laws of physics like that, you can't possibly violate them, so the outcome would be the most dangerous thing to ever happen.
You have the chairman of a brokerage admitting we were a day away from bankrupting multiple short sellers and brokers who allowed this unlimited risk to be taken rather than margin calling the short sellers sooner, and CNBC is still going to blame retail.
And its worse right now ,they turned around and reshorted gme at 80 down to 40 last week. They reported less shorts ,but thats a small fine if they lie. This and next week will be interesting
The mere idea that you could lose an INFINITE amount of money by shorting stocks is RIDICULOUS, as it was clearly exposed in this episode of GME. It is very clear that short-sellers have to immediately be forced to buy stocks when they reach the limit of what they can afford to lose in their accounts, just as the longs have limits and margin calls when they approach the limits of their accounts. It is only logical and common sense. That hole exists most likely for sinister reasons than stupidity, they thought they were never going to be exposed, until GME epic short squeeze and the power of the people on social media sharing knowledge.
@@dpactootle2522 That's already how it's supposed to work. The issue is the lag time in the system (margin calls wait until end of day afaik) and the potential for a stock price to jump above what you can cover are problems that cannot be worked around once you're caught without the power to cheat the system. Even a theoretical instantaneous call runs the risk of not being able to fill if and when the market sees this get triggered and simply refuses to sell their shares anywhere near that price point.
Neither surprised (his inside buddies already informed him) or disappointed (who the hell wants to testify to Congress??). Wtf kind of question is that?
There are two holes in the system. The hole that allowed them to naked short the stock. And the hole that allowed them to change the rules when it was clear they were going to lose.
How do you know anyone was naked shorting? Just because the shares short were more than the shares outstanding? There can be over 100% of the shares short without anyone naked shorting.
@@xxMikePortnoyJrxx Please give an example of a situation where shorting over 100% of the shares that exists is not naked shorting. By definition, naked shorting is the act of selling something that you cannot acquire at current time. If you have shorted 150% of the stocks available, you are obviously naked shorting...
@@lahtin3n Lets say Alice lends the only share in existence to Bob that he then sells to Carl. Carl then lends that share to David that he sells to Elsa. Now Alice and Carl have both lent out the same share. Bob and David both hold a short position on that same share. To recap, there is now two shorted shares born from the only share now in Elsa's possession. There is now a 200% short interest on Elsa's stock. We got here with no naked short involved. I'm not saying there is no naked shorting. Just that >100% doesn't prove it.
"-By the rules as they are today-" Aka: Rules we have manipulated to gain billions. But since the retailers are starting to use the same rules against us, they will be changed.
There has always been a HOLE in the system to benefit short sellers (usually big financial institutions/hedge funds) to bet a whole lot more money than they can afford and not been forced to buy stocks right away to cover their positions and avoid defaulting on their debts. That hole exists to benefit the suits because they thought nobody would ever find it, that is until "the people" got the power of social media to share the knowledge and coordinate their actions. This is similar to how Pyramid Schemes get discovered during a financial crisis... THE EMPEROR HAS NO CLOTHES!
@@cilliandrome956 if you let someone borrow your stock, you get an IOU, that is how the system works. If they actually had to buy in an FTD when T+3 happened then we would have less issues.
@@cryptocrypto105 Yes and no. There is no system to do so because it does not matter. When a short seller borrows my shares, I get a promissory note from them and they sell my share to someone who is long that share. The next guy can let his share be borrowed receive a promissory note ad infinitum. I think this is perfectly fine personally because it allows more situations like this to occur.
@@cryptocrypto105 I think people overestimate the amount of money that was to be made here. Firstly, if the price really shoots up into the thousands and longs start to sell off, the order book would evaporate very quickly and the price would come crashing down as fast as it went up. Secondly, 100 million shorted shares would have had to be covered eventually. So even if all longs somehow developed a hive mind and collectively decided to not sell before the price runs well into the thousands, we'd be approaching a total volume of $1 trillion that would have to be covered eventually. Even if you combine all assets of all hedge funds caught up in this, it seems likely that you wouldn't find enough money between them to actually cover all that. Somehow people still seem to believe that everyone who hopped on board of the short squeeze bus would have been able to sell at prices in the thousands. That is ridiculous and would have never happened, even if the brokers hadn't pulled a fast one on us.
well the reason why short squeezes happen in the first place is because of ridiculous amount of short selling. The source needs to be sorted out if he wants to complain about short squeeze
@@fietspompje259 Market manipulation to knowingly initiate a short squeeze is illegal, but the phenomenon of a short squeeze itself is not. Stop being ignorant. www.sec.gov/investor/pubs/regsho.htm
@AFSullivan91@@fietspompje259 Have either of you been on the forum ? They knew exactly what they were doing. it was an intentional short squeeze. Illegal but very hard to prosecute since it was carried out by 1000s of individuals
So market manipulation is what happened. You prevented retail traders from being able to BUY the stock, and prevented the squeeze. Isn't there laws and jail sentences for manipulating a free market?
And robbing the avarage investor who saw the rocket leaving and wanted to join in. There was more buying power then selling at the 400 levels, and it would have continued if they didn't block buying
I would rather them keep that hole in the system. That way when the new hot shot hedge fund comes up and they get ahead of themselves, I can take advantage of it.
I mean, legally speaking he is correct. If the rules say you can drive a tank at max speed down a street next to a school the tank driver technically isn't to blame. Well, there is someone to blame and it's the people setting up the rules.
If the system has to treat the market as they did because the people they say "my market is your market" to actually used the market how they do and whined like children about it, thats the problem.
It isn't even about the system being able to handle a pile in on one stock, if the price per share had been unrestricted it would have conceivably continued to or above 5k a share, maybe even higher, there's no real way to know. Multiply this by millions of shares, and the people paying that premium having to liquidate the other massive positions in the market that they have to compensate for the payment, this is why it could have triggered a market tanking downward. It would have recovered, but the funds that would have had to pay out the insane price per share would have had to essentially leave the market to do so
@@Dejector only cause he isn't one of the folks at the hearing today lol. Look at the stuff from back in January, this guy blamed retail for the events of that week
It can be, like if one person engineers the whole thing it falls under market manipulation, but even then it can be hard to get a conviction or meaningful sentencing. That's not what happened with GME obviously.
"1. report short interest daily and 2. Increase margin required on shorts" He made perfect suggestions. Can someone in Congress pls listen? It's simple WTF.
So seems as if the reason clearing houses, brokers and the DTCC upped requirements for GME was because they ultimately would have been on the hook to pay for what could have been a very drastic position...
I mean, there were 250 million shares worth in call options outstanding, when people exercise their options in mass, the price goes up literally infinitely because they HAVE to buy them, and there's not enough people selling fast enough for them to actually buy them. Yea it's wrong, but it would have literally put all the major brokerages / clearing firms out of business because all the people who were naked short / selling non hedged call options would just claim bankruptcy leaving them with nothing. You'd end up in a situation where joe blow retail investor would sell his GME shares at $5000+ and there would be no money to give him.
@@jeffshackleford3152 Which is why they increased collateral and caused all the brokerages to put a halt on buying GME. They don't want to be on the hook for everyone going bankrupt and not being able to pay up. Of course it's not fair but that's just how it goes.
@@matthewhodge9748 Every share should be accounted for. Allowing any company to be shorted above 100% of it's available float is unethical, dangerous, and should be illegal.
There has always been a HOLE in the system to benefit short sellers (usually big financial institutions/hedge funds) to bet a whole lot more money than they can afford and not been forced to buy stocks right away to cover their positions and avoid defaulting on their debts. That hole exists to benefit the suits because they thought nobody would ever find it, that is until "the people" got the power of social media to share the knowledge and coordinate their actions. This is similar to how Pyramid Schemes get discovered during a financial crisis... THE EMPEROR HAS NO CLOTHES!
The second part is a good solution. Along with an increase in margin requirements. The first part should not happen. I would rather them get overextended again.
If you owned GME on the day they shut down trading to "save the system" the billionaire hedge funds should have to take 1% of their net worth (consider it a 1% fee) and give it to the people with GME shares, especially those making less than 100k a year
no tourist each gme share should have went to 10000 dollars and above. each of these HF should liquidate 50% of their portfolio as they would have all went bankrupt without this occurring. afterwards then they can pay every single shareholder of GME take a list of all banks and HF MM that was short GME. 10k per SHARE. AT LEAST. as this would have bankrupt the whole stock market. 700 billion is cheap. VERY cheap compared to what would have happened. as a % split it among them this 700 billion bill to all shareholders. if they can survive that they can run their HF if not declare bankruptcy and let their INSURANCE CO handle it.
1%? Well I guess the manipulation was worth it after all. They would've literally gone bankcrupt otherwise. But 1% fee. Small price to pay for gambling with the whole economy.
It is May 14, 2024, and history is repeating itself because the regulators did not listen to Thomas's advice. Shorts continued to criminally overextend themselves rather than admit defeat. They have intentionally dug themselves a hole so deep only the US government can bail them out now. And thus the recklessness of Wall Street will be burdened upon the citizenry once again. And they will try to blame household investors for their mistakes.
Interesting that he doesn't talk about how naked shorts are already ILLEGAL, & if the short sellers weren't BREAKING the LAW then it would (& SHOULD) be impossible to have a stock shorted MORE than 100%! These are laws we ALREADY have, the SEC just isn't enforcing them.
Just because the short interest was over 100% does not mean that illegal short selling took place. You obviously do not understand how short interest is calculated or how short selling works. Please do not comment on things you know nothing of. Thank You.
@@jeffshackleford3152 You sound like a "know it all boomer" so I'm gonna break it down all simple like for yah. MILLENNIALS OWN MORE BITCOIN & ARE ALL MILLIONAIRES THAT CAN AFFORD BLOOMBERG SUBSCRIPTIONS & SEE ALL THE VERY ILLEGAL STUFF YOU BOOMERS ARE DOING & WE'RE VERY POLITELY ASKING, "Pretty please, w/ a mother effing cherry on top, can you stop ILLEGALLY naked shorting & also can you please stop ILLEGALLY short ladder attacking stocks, that we KNOW you have a vested interest in?"
Of course it is (and would be) possible to have a stock shorted more than 100% copletely legally, without naked shorts. Basically, if H thinks that GME is overpriced, they go out and borrow as many shares from A as they can find, and sell them to B. Then B may be willing to lend H their shares - H borrows as many shares from B as they can find, and sells them to C. And repeats the cycle again. Nothing illegal is happening in this example, and there is no upper limit to the number/percentage of shares shorted - except that short interest will rise, and at some point shorting will become simply too expensive.
Never forget January 28. Wall St lost at their own game, on their own court with their own refs. Down by 50 with a minute to go in the final round, they get the refs to throw out the entire game. This is what sore losers do. Frankly I think it’s time to remind them what happened to Marie Antoinette.
Listen to him! He's distressed about broker's obligation to cover @ 2:18. It's not an impossible situation to sort out! Retail would be paid and brokers/shorts would cover. He just doesn't want to lose money even if it requires illegal action.
Total loss of respect for him. Still remember him restricting trading and said it was to protect his brokerage then realized his slip of the tongue then outright lies saying it was to protect customers during the GME short squeeze.
He was being truthful when he said that his brokerage was at risk, because it was. A lot of big boys use IBKR. They are one of the better firms especially for quant strats.
She doesn't have a clue what she's talking about = why is it so hard for CNBC to hire someone that actually read an economics book or went to business school!??
Because the good people work at hedge funds or prop trading firms. Why would anyone with that much knowledge of markets even consider working for CNBC?
Openly admitting fraudulent activity to benefit himself and his elitist buddies. Absolutely sickening. His blasé attitude clearly shows he couldn't care less of the consequences because he knows nothing will happen to him
Shorting is fine. Shorting > 100% is not fine. Though I gotta say that short squeezes are super dangerous. Believe me, you don't want the stock market to crash in that manner because that would mean a lot of bust pension funds, bust savings and a lot of money in the system that's not longer "parked" in the stock market but in the open market. That's an instant inflation.
So when average people play by their rules and start winning, that's when there's a "hole" in the system? Why did the hedge funds willingly put themselves through that type of risk to begin with? Did they know that at the end of the day they'd always win regardless of anything and face zero consequences for their actions? Such democratic system. Much fair society. Many free market.
That was what was supposed to happen the short squeeze to the moon. Why didn't happen? I think that's what Congress wants to know. I know that's what the public wants to know. At least he didn't say that talking about stocks should be illegal.
Shorting stocks should not exist. Things are too complicated - keep it simple. You should be able to BUY stocks and SELL stocks. Thats it. You decide to invest in a company and share its success and failures or you don't.
We are aware .. had you all not allowed a stock to be shorted 140% this does not happen. We saw a play and played it. You decided you messed up and pulled the plug. That is what happened!!!
@@shortcutDJ If I let you borrow my stock I get an IOU from you and you sell it to some guy. That guy can then lend it to you, you give him an IOU and then you can sell the original share again. So there is no double spending you are just short 2 shares with the ability to borrow another one. That is how it works in the current system, nobody has double spent anything you just owe me and that guy a share. The problem starts to happen when me and all my friends decide to not let our shares be borrowed anymore and keep buying the shares you have borrowed. That is how FTDs start to stack in the system. Which is fine if the FTDs get bought in at (T+3). The real problem arises when nobody has to buy in their FTDs. That is when the real danger starts to happen, because the brokers who allowed them to borrow shares are behind on shares and still have to buy in, no matter what the price is currently. So theoretically like in GME, the price action could have caused whatever entity that allowed the people to borrow shares has to buy in at a much higher price than they were expecting, eating that loss.
Zero accountability for the responsibility of greedy and irresponsible naked short selling. Unreal. This shall go down in history and I will never forget this
1 Year ago. And nothing has changed. No one in jail, no squeeze, no justice for the Billion's stolen from retail investors on the Market Manipulators bad bet.
So it's legal to sell an enormous number of options, even if you'll be unable to deliver even a quarter of them, sell almost double the amount of outstanding shares short and fail to deliver millions of shares on a single business day. But a bunch of ordinary people buying an allegedly overpriced stock is market manipulation?
Get real. No merger was announced yet with Lucid you are buying on pure speculation like everyone else. If you post margin you help the broker work with you but if you didn’t have the margin they also lose money from your risky bets.
In this video he heavily implies that communication between retail investors was to blame for an "illegal short squeeze", which makes sense if you are talking about what Mark Cuban was cited as suggesting (that Call options be exercised, forcing Brokers to buy stocks at any price) thus kickstarting the squeeze. However, he completely ignores 2 things: 1. That shorts had been excessively shorting this stock for years and making money from that, and 2. That brokers were allowing short interest to exceed 100%. Is there no accountability to brokers for allowing more stocks to be sold than exist in the market? Of course, that would implicate his own tacit responsibility in the whole mess and almost collapse of the market. As soon as the short interest came close to 100% (which is apparently reported twice a month) then these positions should not be allowed. Short positions were STILL being taken DURING the issue to drive the price down. It is actually ridiculous.
Funny he says that ...yall know VRM..why is VRM price up this morning.. ..oh yeah because "Wells Fargo" raised the price target to $60 to cover their interest... But Wallstreet bets and Roaring kitty are the villains
How the fk can u Short more than 100% of the stock??? Whoever allowed it should be held responsible for making up any resulting damages. Sounds like the responsible party is the fkg brokers!!!
The broker allowed institute trader to short a stock. If broker didn't allow, there would have no problem. He still wants to earn money from shorting a stock.
50 million shares outstanding, 75 million shares short, 150-200 million potential shares needed to cover call options... yeah, the short interest is a problem, but the call options seem to be a big issue too. On the morning of Jan 25th, options contracts were only priced up to the $200 strike price. The price on that day rose to an intraday high of ~$160 and pretty soon, option contracts were being drafted for the $500, $600, $800 strike. Market makers love selling out of the money call options because they will more often than not expire worthless and they can collect on them 100%. It seems to me that they should have stuck with the original $200 strike and re-evaluated their ranges at the end of the week instead of digging themselves a hole by drafting new strike prices in the middle of the week. I'm guessing that they thought that they could get away with selling $500 strike contracts and started sweating when it finally hit $483.
@@jeffshackleford3152 just seemed odd that they didn’t open any new strike prices the week before. All calls expired in the money, retail wins. And in the following week the strikes kept climbing
@@derekfcc Like I said I do not remember the CBOE rules exactly for opening new strikes on the front week. They opened higher strikes on the second week though.
People were so close to “destroying” the stock market because shorts were so greedy that they created a position that was literally impossible to cover (50m outstanding shares, needed 120m to fully cover). There shouldn’t need to be rules/regs in place for this because shorts shouldn’t be stupid enough to do this. And if they collapse the financial market because of their greed and arrogance, then they have to pay that price financially and politically. GME and other “meme” stocks holders were playing by the rules “that are currently established” and would have won of IB and Robinhood didn’t bail these hedges out. Disgusting
So the brokers had to cover their asses which in turn covered the shorts asses but the shorts must have know this would have been the case already so they knew the brokers would be the scapegoat damn
There are people to blame. Can short all they want but when it doesn't go their way they change the rules. Corrupt system.
who changed what rules? margin call has existed as long as the financial system has. whether you are shorting or leveraged in anyway, you need to be able to show you can cover, if you don't you forfeit your position. when someone buys 100 shares of gamestop at 300 on robbinhood with RH gold, they are leveraged. ROBIN HOOD, is responsible to be able to cover that leverage, they could not, so they had to halt trading. if they don't halt trading then bye bye robinhood. Thats always been the rules, who changed what??
@@theperson3693 The DTCC changed the rules by changing the collateral for clearing from around 3% to 100%. They did this to protect the hedge funds because they knew that the funds wouldn't be able to cover and would be bankrupted. They knew that brokerages that don't have their own well capitalized clearing would not be able to cover the collateral and would have to stop the purchase of the stock. That is changing the rules to bail out the market predators at the expense of retail investors.
@@theperson3693 Taking away the "buy" option but leaving the "sell" option is changing the rules.
@@obiwanpierogi It's not corrupt at all. It's how the system should be. These WallStBets idiots need to be arrested and spend some time in prison, or worse. The genetic lineages of the real traders from hedge funds are strong, and consist of long line of rich and successful people, many close to royalty. These people were selected by evolution and natural selection to be successful and there's a reason they are. To allow the WallStBets people to just come into the system and make their own decisions is destructive and dangerous. It's going against the natural laws of the universe. These traders on reddit come from poor genetic lines that are not pure and contain many mistakes and very few successful and rich people. To act like they have any right to do this when they have zero family history of it is absurd. Allowing this is essentially reversing the survival of the fittest, and if you go against nature like that there will be consequences, likely a collapse of the entire system.
If this is allowed to happen there would be death and destruction the likes of which we have never seen. And I think bringing back serfdom would be the solution, and might even be a solution at the moment for the people and families of those taking part in WallStBets, supporting them, or being exposed to the concept. If we don't quell it right now we will be going against evolution. You can't just go against the laws of physics like that, you can't possibly violate them, so the outcome would be the most dangerous thing to ever happen.
@@lost4468yt There aren't enough facepalms in this universe to express how that post made me feel.
You have the chairman of a brokerage admitting we were a day away from bankrupting multiple short sellers and brokers who allowed this unlimited risk to be taken rather than margin calling the short sellers sooner, and CNBC is still going to blame retail.
More like minutes...
...and they still haven't covered. Look at XRT.
The margin was too small and did not fit to the risk. It was a very profitable loop hole for shorts.
And its worse right now ,they turned around and reshorted gme at 80 down to 40 last week. They reported less shorts ,but thats a small fine if they lie. This and next week will be interesting
And potentially collapse the entire market
Who put the system at risk? Who was taking advantage of the hole in the system?? The hedgefunds!!
Very true.
This guy knows what INFINITE means, you could tell the day it happened he was SHOOK
The mere idea that you could lose an INFINITE amount of money by shorting stocks is RIDICULOUS, as it was clearly exposed in this episode of GME. It is very clear that short-sellers have to immediately be forced to buy stocks when they reach the limit of what they can afford to lose in their accounts, just as the longs have limits and margin calls when they approach the limits of their accounts. It is only logical and common sense. That hole exists most likely for sinister reasons than stupidity, they thought they were never going to be exposed, until GME epic short squeeze and the power of the people on social media sharing knowledge.
Homeboy all the sell limits in the trillions and saw his life flash before his very eyes.
@@dpactootle2522 That's already how it's supposed to work. The issue is the lag time in the system (margin calls wait until end of day afaik) and the potential for a stock price to jump above what you can cover are problems that cannot be worked around once you're caught without the power to cheat the system.
Even a theoretical instantaneous call runs the risk of not being able to fill if and when the market sees this get triggered and simply refuses to sell their shares anywhere near that price point.
Neither surprised (his inside buddies already informed him) or disappointed (who the hell wants to testify to Congress??). Wtf kind of question is that?
@@dpactootle2522 dude, your comment is worthy of being framed.
There are two holes in the system. The hole that allowed them to naked short the stock. And the hole that allowed them to change the rules when it was clear they were going to lose.
How do you know anyone was naked shorting? Just because the shares short were more than the shares outstanding? There can be over 100% of the shares short without anyone naked shorting.
I would like them to keep allowing the short selling amount to be that high. That way we can keep having these situations occur.
The first hole isn't a problem if the second hole isn't allowed.
@@xxMikePortnoyJrxx Please give an example of a situation where shorting over 100% of the shares that exists is not naked shorting.
By definition, naked shorting is the act of selling something that you cannot acquire at current time. If you have shorted 150% of the stocks available, you are obviously naked shorting...
@@lahtin3n Lets say Alice lends the only share in existence to Bob that he then sells to Carl. Carl then lends that share to David that he sells to Elsa.
Now Alice and Carl have both lent out the same share. Bob and David both hold a short position on that same share. To recap, there is now two shorted shares born from the only share now in Elsa's possession.
There is now a 200% short interest on Elsa's stock. We got here with no naked short involved. I'm not saying there is no naked shorting. Just that >100% doesn't prove it.
Yes!!! He actually admitted it. Thank you. No wonder they didn’t have him at the hearing.
The interviewers don't even know what margin requirements are.
The interviewer tried to pin it on short interest reporting and that retailers can orchestrate a short squeeze from it. They are so anti-us.
They know. They just need to inform the audience hence they ask
@@dothedeed more likely they’re trying to manipulate the audience for their easily butt hurt Overlords benefit.
I don't even know what that is and I could tell that she didn't know what the f*** that was. Lol
@@doronyaniv9205 In this sense think of it as loaned money used to buy securities.
"-By the rules as they are today-" Aka: Rules we have manipulated to gain billions. But since the retailers are starting to use the same rules against us, they will be changed.
There has always been a HOLE in the system to benefit short sellers (usually big financial institutions/hedge funds) to bet a whole lot more money than they can afford and not been forced to buy stocks right away to cover their positions and avoid defaulting on their debts. That hole exists to benefit the suits because they thought nobody would ever find it, that is until "the people" got the power of social media to share the knowledge and coordinate their actions. This is similar to how Pyramid Schemes get discovered during a financial crisis... THE EMPEROR HAS NO CLOTHES!
@@dpactootle2522 I would prefer that Steve Cohen keeps his clothes on...
well in this instance they did it to stop them from LOSING billions more than they already did.
Wish I could upvote this more.
@@cilliandrome956 if you let someone borrow your stock, you get an IOU, that is how the system works. If they actually had to buy in an FTD when T+3 happened then we would have less issues.
Short interest above 100% but no one's to blame lmao
@@cryptocrypto105 Yes and no. There is no system to do so because it does not matter. When a short seller borrows my shares, I get a promissory note from them and they sell my share to someone who is long that share. The next guy can let his share be borrowed receive a promissory note ad infinitum. I think this is perfectly fine personally because it allows more situations like this to occur.
@@cryptocrypto105 I think people overestimate the amount of money that was to be made here.
Firstly, if the price really shoots up into the thousands and longs start to sell off, the order book would evaporate very quickly and the price would come crashing down as fast as it went up.
Secondly, 100 million shorted shares would have had to be covered eventually. So even if all longs somehow developed a hive mind and collectively decided to not sell before the price runs well into the thousands, we'd be approaching a total volume of $1 trillion that would have to be covered eventually. Even if you combine all assets of all hedge funds caught up in this, it seems likely that you wouldn't find enough money between them to actually cover all that.
Somehow people still seem to believe that everyone who hopped on board of the short squeeze bus would have been able to sell at prices in the thousands. That is ridiculous and would have never happened, even if the brokers hadn't pulled a fast one on us.
Short squeezes are NOT illegal, do not let this man lie. Everything else he said was true though
They are in some countries.
he said typically its market manipulation, but this was a different case.
well the reason why short squeezes happen in the first place is because of ridiculous amount of short selling. The source needs to be sorted out if he wants to complain about short squeeze
@@purplerings1969 You can theoretically squeeze any stock, it just becomes easier (and more extreme) the higher the short interest is
short squeeze is a result of many illegal moves. its not directly illegal, but mostly yes xD
Short squeezing is NOT illegal nor market manipulation. Abusive short-selling however, is both.
@@fietspompje259 Market manipulation to knowingly initiate a short squeeze is illegal, but the phenomenon of a short squeeze itself is not. Stop being ignorant.
www.sec.gov/investor/pubs/regsho.htm
@AFSullivan91@@fietspompje259 Have either of you been on the forum ? They knew exactly what they were doing. it was an intentional short squeeze. Illegal but very hard to prosecute since it was carried out by 1000s of individuals
Ok, i will buy more GME 🙌
DIAMOND HAND IT THIS TIME
🚀🚀🚀
We like the STONK lmao
hodl
So market manipulation is what happened. You prevented retail traders from being able to BUY the stock, and prevented the squeeze. Isn't there laws and jail sentences for manipulating a free market?
Only if your aren't already rich
And robbing the avarage investor who saw the rocket leaving and wanted to join in. There was more buying power then selling at the 400 levels, and it would have continued if they didn't block buying
till this day... no
Laws are for rich people silly, us workers get nothing but the boot.
Public admission of millions of synthetic shares.
They should open the hearing on congress with this, he basically admits it all, what a joke of a world we live in
Congress is having additional hearing with additional witness. Contact your representatives!!!
These guys are like that spoiled cousin that flips the monopoly board over when they start losing.
So true
i flipped a monopoly board over when i was about 11. not sure why, but i did.
"no one is to blame" oh ok.
no one to blame except those that shorted over 100%.
I would rather them keep that hole in the system. That way when the new hot shot hedge fund comes up and they get ahead of themselves, I can take advantage of it.
I mean, legally speaking he is correct. If the rules say you can drive a tank at max speed down a street next to a school the tank driver technically isn't to blame. Well, there is someone to blame and it's the people setting up the rules.
I mean if the system can't handle a pile on in one stock... there is bigger underlying problems
Well said.
Corruption
You can argue that system deserves to fail...
If the system has to treat the market as they did because the people they say "my market is your market" to actually used the market how they do and whined like children about it, thats the problem.
It isn't even about the system being able to handle a pile in on one stock, if the price per share had been unrestricted it would have conceivably continued to or above 5k a share, maybe even higher, there's no real way to know. Multiply this by millions of shares, and the people paying that premium having to liquidate the other massive positions in the market that they have to compensate for the payment, this is why it could have triggered a market tanking downward. It would have recovered, but the funds that would have had to pay out the insane price per share would have had to essentially leave the market to do so
Shorts never closed !!! It is not over,just the beginning #Gamestop
He just said the quiet part out loud, and the female interviewer didn’t know how to recover. Lol
Pretty sure he knew what he was doing. In terms of rich money bags, this guy was being super bold and honest.
@@Dejector only cause he isn't one of the folks at the hearing today lol. Look at the stuff from back in January, this guy blamed retail for the events of that week
It's not impossible to sort out. He literally explained how it would be done. People really do fail upwards in life.
But only if they already have billions of daddy's money.
But that would make rich people poor. Literally impossible and not what the system is designed to do.
A short squeeze is not illegal.
Where do you get this information?
It can be, like if one person engineers the whole thing it falls under market manipulation, but even then it can be hard to get a conviction or meaningful sentencing. That's not what happened with GME obviously.
His ass.
I'm sure you know more than a guy worth multiple billions
@@Beblue1337 Hmm money makes you smarter now?
Maybe a better money manager .. no .. he just a lot more money.
@@Beblue1337 He's not under oath, there's very limited risk to lying in this particular instance.
Why do DFV have to go to court for stock fraud, all he ded was mentioning them publicly. And they literally manipulate the system
SEC, is this not market manipulation?
Time to boycott the market & move to crypto.
I really don't get why more people don't leave the markets and go to crypto! I'm with you my guy
@@Waterworks77 they will just figure out derivatives on crypto and screw with that too.
"1. report short interest daily and 2. Increase margin required on shorts" He made perfect suggestions. Can someone in Congress pls listen? It's simple WTF.
So seems as if the reason clearing houses, brokers and the DTCC upped requirements for GME was because they ultimately would have been on the hook to pay for what could have been a very drastic position...
yep this
Who cares. If they don't like it they should have counted the shorts they were selling to the hedges.
I mean, there were 250 million shares worth in call options outstanding, when people exercise their options in mass, the price goes up literally infinitely because they HAVE to buy them, and there's not enough people selling fast enough for them to actually buy them. Yea it's wrong, but it would have literally put all the major brokerages / clearing firms out of business because all the people who were naked short / selling non hedged call options would just claim bankruptcy leaving them with nothing. You'd end up in a situation where joe blow retail investor would sell his GME shares at $5000+ and there would be no money to give him.
@@TDohertyProductions Actually the DTCC group is on the hook for this. They are the back stop of all trades in US markets.
@@jeffshackleford3152 Which is why they increased collateral and caused all the brokerages to put a halt on buying GME. They don't want to be on the hook for everyone going bankrupt and not being able to pay up. Of course it's not fair but that's just how it goes.
Well, maybe there should be a law against allowing more than 30% short interest, or not being able to short until you have actual borrowed shares.
you should be allowed to short 100% of the company. If you own 100% of the stock.
@@matthewhodge9748 Every share should be accounted for. Allowing any company to be shorted above 100% of it's available float is unethical, dangerous, and should be illegal.
There has always been a HOLE in the system to benefit short sellers (usually big financial institutions/hedge funds) to bet a whole lot more money than they can afford and not been forced to buy stocks right away to cover their positions and avoid defaulting on their debts. That hole exists to benefit the suits because they thought nobody would ever find it, that is until "the people" got the power of social media to share the knowledge and coordinate their actions. This is similar to how Pyramid Schemes get discovered during a financial crisis... THE EMPEROR HAS NO CLOTHES!
@@dpactootle2522 - And nothing will change. This stuff is so above the head of congressmen and women.
The second part is a good solution. Along with an increase in margin requirements.
The first part should not happen. I would rather them get overextended again.
So now that he's admitted to market manipulation by restricting selling of GME on Interactive Brokers, what is his punishment?
If you owned GME on the day they shut down trading to "save the system" the billionaire hedge funds should have to take 1% of their net worth (consider it a 1% fee) and give it to the people with GME shares, especially those making less than 100k a year
Wouldn’t be enough at all to cover what it would have gone too.
no tourist each gme share should have went to 10000 dollars and above.
each of these HF should liquidate 50% of their portfolio as they would have all went bankrupt without this occurring.
afterwards then they can pay every single shareholder of GME
take a list of all banks and HF MM that was short GME.
10k per SHARE. AT LEAST.
as this would have bankrupt the whole stock market.
700 billion is cheap.
VERY cheap compared to what would have happened.
as a % split it among them this 700 billion bill to all shareholders.
if they can survive that they can run their HF if not declare bankruptcy and let their INSURANCE CO handle it.
1%? Well I guess the manipulation was worth it after all. They would've literally gone bankcrupt otherwise. But 1% fee. Small price to pay for gambling with the whole economy.
So they just admitted manipulating the market? How nice of them
This guy is lying, short squeeze is not illegal. WTF?!?!? "A hole in the system we have to stop"...wow
It is May 14, 2024, and history is repeating itself because the regulators did not listen to Thomas's advice.
Shorts continued to criminally overextend themselves rather than admit defeat.
They have intentionally dug themselves a hole so deep only the US government can bail them out now.
And thus the recklessness of Wall Street will be burdened upon the citizenry once again.
And they will try to blame household investors for their mistakes.
They are due to buy back the stock so make them and accept the outcome. And send them to jail too.
This will always be a certified hood classic
Buy, hodl, vote. $10,000,000
Interesting that he doesn't talk about how naked shorts are already ILLEGAL, & if the short sellers weren't BREAKING the LAW then it would (& SHOULD) be impossible to have a stock shorted MORE than 100%! These are laws we ALREADY have, the SEC just isn't enforcing them.
Just because the short interest was over 100% does not mean that illegal short selling took place. You obviously do not understand how short interest is calculated or how short selling works. Please do not comment on things you know nothing of. Thank You.
@@jeffshackleford3152 You sound like a "know it all boomer" so I'm gonna break it down all simple like for yah. MILLENNIALS OWN MORE BITCOIN & ARE ALL MILLIONAIRES THAT CAN AFFORD BLOOMBERG SUBSCRIPTIONS & SEE ALL THE VERY ILLEGAL STUFF YOU BOOMERS ARE DOING & WE'RE VERY POLITELY ASKING, "Pretty please, w/ a mother effing cherry on top, can you stop ILLEGALLY naked shorting & also can you please stop ILLEGALLY short ladder attacking stocks, that we KNOW you have a vested interest in?"
@@usmccoop Have you even read Reg SHO?
Of course it is (and would be) possible to have a stock shorted more than 100% copletely legally, without naked shorts. Basically, if H thinks that GME is overpriced, they go out and borrow as many shares from A as they can find, and sell them to B. Then B may be willing to lend H their shares - H borrows as many shares from B as they can find, and sells them to C. And repeats the cycle again. Nothing illegal is happening in this example, and there is no upper limit to the number/percentage of shares shorted - except that short interest will rise, and at some point shorting will become simply too expensive.
@@jeffshackleford3152 over 100% means they were shorting stocks that didnt even exist you moron
Never forget January 28. Wall St lost at their own game, on their own court with their own refs. Down by 50 with a minute to go in the final round, they get the refs to throw out the entire game. This is what sore losers do. Frankly I think it’s time to remind them what happened to Marie Antoinette.
Thanks for that info Mr. Peterffy. Time to buy more. 🚀🚀🚀
Listen to him! He's distressed about broker's obligation to cover @ 2:18. It's not an impossible situation to sort out! Retail would be paid and brokers/shorts would cover. He just doesn't want to lose money even if it requires illegal action.
Total loss of respect for him. Still remember him restricting trading and said it was to protect his brokerage then realized his slip of the tongue then outright lies saying it was to protect customers during the GME short squeeze.
Link?
Brokers are to blame for allowing naked shorting
@@sarak6083 We do not know if illegal short selling was occurring.
He was being truthful when he said that his brokerage was at risk, because it was. A lot of big boys use IBKR. They are one of the better firms especially for quant strats.
@@jeffshackleford3152 then his firm shouldnt be selling unlimited naked shorting of shares
She doesn't have a clue what she's talking about = why is it so hard for CNBC to hire someone that actually read an economics book or went to business school!??
Because then we would have real questions and they don't want that
LOL reading an economics textbook you must be joking. Why would you place any value in outdated ECON101 nonsense that does not even apply to today.
Because the good people work at hedge funds or prop trading firms. Why would anyone with that much knowledge of markets even consider working for CNBC?
They don’t teach this in economics or business school
@@NevadaHypnotherapy Ahhhh, yes they do = grade 10, 11, 12 & 13 ECONOMICS BOOK!! #AnyHighSchoolUSA
This man is admitting to market manipulation in this video
This chick needs to make herself useful somewhere else, he was explaining it clear af
They are still shorting though. Just look at XRT ETF that has gme.
Openly admitting fraudulent activity to benefit himself and his elitist buddies. Absolutely sickening. His blasé attitude clearly shows he couldn't care less of the consequences because he knows nothing will happen to him
How can shorting be legal but short squeezing illegal? You can’t have one without the other
Shorting is fine. Shorting > 100% is not fine.
Though I gotta say that short squeezes are super dangerous. Believe me, you don't want the stock market to crash in that manner because that would mean a lot of bust pension funds, bust savings and a lot of money in the system that's not longer "parked" in the stock market but in the open market. That's an instant inflation.
@@B20C0 That's fine, we'll take it.
So when average people play by their rules and start winning, that's when there's a "hole" in the system? Why did the hedge funds willingly put themselves through that type of risk to begin with? Did they know that at the end of the day they'd always win regardless of anything and face zero consequences for their actions? Such democratic system. Much fair society. Many free market.
That was what was supposed to happen the short squeeze to the moon. Why didn't happen? I think that's what Congress wants to know. I know that's what the public wants to know. At least he didn't say that talking about stocks should be illegal.
Only if we want to be like China. They aren't allowed to talk stocks on the net
It’s not complicated. He spoke in very simple English slowly.
Here's some simple English for yah: NAKED SHORTS ARE ILLEGAL! Simple enough for you?
Appreciate you giving us the blueprint, Thomas.
3:06 "Short squeezes are illegal"...
„Pushing the price into the thousands”. I know why I’m still in it!
"the internet can chit chat..." you mean like hedgefunds? He's just mad the peons found the playbook.
Shorting stocks should not exist. Things are too complicated - keep it simple. You should be able to BUY stocks and SELL stocks. Thats it. You decide to invest in a company and share its success and failures or you don't.
How dare the peasants use social media to do exactly what hedge funds do at business lunches.
Please, speak to her as you might to a young child, or a golden retriever.
Margin call reference. One of my favorite movies of all time
😂
Imagine shorting a stock by 120% and selling 1.5 Million worth of naked calls and then saying no one is to blame lmfaoooooo
Don't Stop Can't Stop Gamestop!
This is completely unacceptable. These hedge funds and their cronies need to pay.
Time to buy more calls and shares on Monday
The SEC works for the money makers. They could do lots of things.
We are aware .. had you all not allowed a stock to be shorted 140% this does not happen.
We saw a play and played it.
You decided you messed up and pulled the plug.
That is what happened!!!
put stocks on an immutable ledger like blockchain, no more double spending.
Plus, full accountability and transparency. It is absurd that the information on Shorts for a stock is given out with a 2 week delay.
EXACLTLY!
Short selling does not work like that. There is no double spend.
@@jeffshackleford3152 it works for loaning just the same as it does for spending.
@@shortcutDJ If I let you borrow my stock I get an IOU from you and you sell it to some guy. That guy can then lend it to you, you give him an IOU and then you can sell the original share again.
So there is no double spending you are just short 2 shares with the ability to borrow another one.
That is how it works in the current system, nobody has double spent anything you just owe me and that guy a share.
The problem starts to happen when me and all my friends decide to not let our shares be borrowed anymore and keep buying the shares you have borrowed. That is how FTDs start to stack in the system. Which is fine if the FTDs get bought in at (T+3).
The real problem arises when nobody has to buy in their FTDs. That is when the real danger starts to happen, because the brokers who allowed them to borrow shares are behind on shares and still have to buy in, no matter what the price is currently.
So theoretically like in GME, the price action could have caused whatever entity that allowed the people to borrow shares has to buy in at a much higher price than they were expecting, eating that loss.
Nice they left all the evidence so they can just link people when part 2 happens.
Part 2, to infinity and beyond.
It's now May 2024, and part 2 is about to go down.
Zero accountability for the responsibility of greedy and irresponsible naked short selling. Unreal. This shall go down in history and I will never forget this
They’re changing the rules but what about all the regular joes who have been ROBBED thousands of hard earned dollars in this process?
Few understand this 😩😩
💎🙌🙌💎
HOLDING SINCE JANUARY #GME 🚀
1 Year ago. And nothing has changed. No one in jail, no squeeze, no justice for the Billion's stolen from retail investors on the Market Manipulators bad bet.
So it's legal to sell an enormous number of options, even if you'll be unable to deliver even a quarter of them, sell almost double the amount of outstanding shares short and fail to deliver millions of shares on a single business day. But a bunch of ordinary people buying an allegedly overpriced stock is market manipulation?
You guys owe me some cashola
The US market is a scam. Buy a timeshare instead or visit a casino those have rules
This guy cut my margin on CCIV during the most impressive growth of a pre IPO company in history.
Get real. No merger was announced yet with Lucid you are buying on pure speculation like everyone else. If you post margin you help the broker work with you but if you didn’t have the margin they also lose money from your risky bets.
The Margin should be cut. More volatility = more risk.
@@wootwootwoot32 ok see you at $120 when risk is off.
F
Vlad belongs in jail.
Vlad was on the end of puppet strings pulled by the likes of Peterffy.
Vlad is a pretty boy with long hair. He better train that exit to be an entrance siswet style if he goes there.
It is possible to sort out if you would let them collapse or not let them short the way they did. Simple
This guy just admitted that it was a massive scam "that nobody did it"
Collapsing the corrupt system is a good thing.
The system is rigged and they people figured out a way to play.
Power to the people 💪🙌stick it to the man.
Tax these clowns at 90%.
What a joke free market.
wtf this is the person we most need to have at that hearing
No, it's not confusing. IT'S STEALING!
At the end of the day, the big guys got away with it again.
This is gonna get ugly, buckle your seatbelts
In this video he heavily implies that communication between retail investors was to blame for an "illegal short squeeze", which makes sense if you are talking about what Mark Cuban was cited as suggesting (that Call options be exercised, forcing Brokers to buy stocks at any price) thus kickstarting the squeeze. However, he completely ignores 2 things: 1. That shorts had been excessively shorting this stock for years and making money from that, and 2. That brokers were allowing short interest to exceed 100%. Is there no accountability to brokers for allowing more stocks to be sold than exist in the market? Of course, that would implicate his own tacit responsibility in the whole mess and almost collapse of the market. As soon as the short interest came close to 100% (which is apparently reported twice a month) then these positions should not be allowed. Short positions were STILL being taken DURING the issue to drive the price down. It is actually ridiculous.
Funny he says that ...yall know VRM..why is VRM price up this morning.. ..oh yeah because "Wells Fargo" raised the price target to $60 to cover their interest...
But Wallstreet bets and Roaring kitty are the villains
the hole in the system is short squeezes? What's wrong with people taking advantage of this? The poor will eat the rich.
Don't blame the retailers. First of all we learned to short squeeze from hedge funds, Wall Street financial advisors, Wall Street!!!
Goddamnit. Is the moass still on?
Welcome back, friends
White collar robbery, I want my money!
How the fk can u Short more than 100% of the stock??? Whoever allowed it should be held responsible for making up any resulting damages. Sounds like the responsible party is the fkg brokers!!!
He is correct on the solution, just raise the cost of short by 1%.
The broker allowed institute trader to short a stock. If broker didn't allow, there would have no problem. He still wants to earn money from shorting a stock.
50 million shares outstanding, 75 million shares short, 150-200 million potential shares needed to cover call options... yeah, the short interest is a problem, but the call options seem to be a big issue too. On the morning of Jan 25th, options contracts were only priced up to the $200 strike price. The price on that day rose to an intraday high of ~$160 and pretty soon, option contracts were being drafted for the $500, $600, $800 strike. Market makers love selling out of the money call options because they will more often than not expire worthless and they can collect on them 100%. It seems to me that they should have stuck with the original $200 strike and re-evaluated their ranges at the end of the week instead of digging themselves a hole by drafting new strike prices in the middle of the week. I'm guessing that they thought that they could get away with selling $500 strike contracts and started sweating when it finally hit $483.
The CBOE has certain rules to making option strikes open, I forget exactly how they do it, but there is a very defined set of rules for doing so.
@@jeffshackleford3152 just seemed odd that they didn’t open any new strike prices the week before. All calls expired in the money, retail wins. And in the following week the strikes kept climbing
@@derekfcc Like I said I do not remember the CBOE rules exactly for opening new strikes on the front week. They opened higher strikes on the second week though.
People were so close to “destroying” the stock market because shorts were so greedy that they created a position that was literally impossible to cover (50m outstanding shares, needed 120m to fully cover). There shouldn’t need to be rules/regs in place for this because shorts shouldn’t be stupid enough to do this. And if they collapse the financial market because of their greed and arrogance, then they have to pay that price financially and politically.
GME and other “meme” stocks holders were playing by the rules “that are currently established” and would have won of IB and Robinhood didn’t bail these hedges out. Disgusting
So... shut down a free market revolution.
You really what the alternative revolutions?
Its a big club. And you ain't in it.
Now that's the explanation of what happened! Vlad is just a schoolboy, and not a very bright one at that, who somehow got in the adults' game.
So the brokers had to cover their asses which in turn covered the shorts asses but the shorts must have know this would have been the case already so they knew the brokers would be the scapegoat damn