Thread by @live2beingu

#AMC #GME #TSLA #KOSS #OCGN #MEMESTOCK #MOONING #L2BU Part 2 Skin In The Game - We were talking about the importance of the clearing fund...here is what it is used for "The Clearing Fund may also be used to make good losses or expenses suffered by the Corporation or losses

suffered by the Clearing Fund resulting from borrowings pursuant to the authority in Rule 1006(f): (i) as a result of the failure of any Clearing Member to discharge duly any obligation on or arising from any confirmed trade accepted by the Corporation, (ii) as a result of the

failure of any Clearing Member (including any Appointed Clearing Member) or of CDS to perform its obligations (including its obligations to the correspondent clearing corporation) under or arising from any exercised or assigned option contract or matured future or any other

contract or obligation issued, undertaken, or guaranteed by the Corporation or in respect of which the Corporation is otherwise liable, (iii) as a result of the failure of any Clearing Member to perform any of its obligations to the Corporation in respect of the stock loan and

borrow positions of such Clearing Member, (iv) in connection with any liquidation of a Clearing Member’s open positions, (v) in connection with protective transactions effected for the account of the Corporation pursuant to Chapter XI of the Rules, (vi) as a result of the

failure of any Clearing Member to make any other required payment or render any other required performance, or (vii) as a result of the failure of any bank or securities or commodities clearing organization to perform its obligations to the Corporation for reasons specified in

paragraph (c) of this Rule 1006. " Did you catch any good phrases in that useful rule????? I caught Borrowing, Short interest, Failed to delivers, liquidation of positions, payment failure, and protection transactions. I wonder why this is being amended...So now you know what

it's used for lets talk about what it's changing So the Waterfall Calculation that we talked about in part 1 I'll do a recap :

Previous Equation: Losses (L) + Margin + Clearing Fund Contribution of Default member + Excess Capital from OCC (LNAFBE = Liquid Net Assets Fund Bal.

Equity) + Clearing Fund contributions of Non-Default Member.

New Equation to deal with liquify shortfalls and Losses = Losses (L) +Margin +Clearing Fund Contribution of Default member +Minimum Corporate Contribution + Excess Capital from OCC (LNAFBE) = Residual/Remaining

Remaining Balance. To net out the remaining balance if any we will take the (Remaining Balance) + Clearing Fund of Non Member and Executive Deferred Compensation Plan . So this equation added another 15% of additional funds just in case one of or uses actually happens and then

they need to have my money at the ready. So lets talk about the 3) Change - How would the OCC determine if LNAFBE for the purposes of contribution more than 110% to cover default losses and liquidity shortfalls? First it would provide for the calculation by using it's own

undated financial statements immediately before or after the loss or deficiency minus any amount equal to the aggregate of all refunds made or authorized. This change is tells us 1) that the OCC will never let it's Liquid net Assets fall below 110%. 2) The funds being set aside

it are not commingled with other items so it's restricted cash. So the fund should never really run out of cash. At least it hopes it doesn't. The Fourth and Final rule change is to Replenish Minimum Corporate Contribution. So what is this about...The OCC has 270 days during

which the minimum corporate contribution would reduce any unused portion of the minimum corporate contribution. Each time the OCC had to bailout a member because they defaulted or one of the many incidences occurred under the Rule 1006 it would trigger a new 270 day rule (9

Months). This period of time is used to make up the additional 10% of it's Liquid Net Assets Fund Balance. Okay So we've gotten through the rules now how do they apply to me and why should I be concerned.

If your in the options market then you may have run across the battle of

the greeks aka Theta, Vega, Delta, and Gamma. For the purpose of this tweet and the YouTube video I'll talk about Theta risk measurement tool. Theta as we know is the rate of change between the option price and time. More or less how options decay over time.

Okay so what about theta is so important. Here are the General Rules - so get out a pen and paper I'm about to take you all to school... This is important for you to remember because you will need this for the ending of of either Part 3 or part 4. I hope this won't take four

posts but we will see. 🤞 Remember what we talked about before and remember what we are talking about now this will help us in our defeat of the HF and MM. So Let's cover some Definitions:

Long calls and puts are and will have have a negative theta.

Short Calls and puts will have a positive theta

Zero Theta means that the option is not eroded by time decay.

Call option - is a contract between a buyer (option holder) seller (option writer) This gives the holder the right to buy but not he obligation to buy shares of the underlying security

at an agreed upon price.

Okay this is nice but please get to the point already. Getting there Rome wasn't built in a day lol. Let's talk strategy. Why are you bringing this up....Because understanding Theta and the strategies therein will help us figure out next steps.

By next steps I mean lets look at how these strategies are used by both us and HF/MM. I'm going to just give a brief overview as there is a lot to unpack here and I don't want you all missing the forest for the trees. so Lets talk strategy:

Long Call Strategy - that you or me will buy the option and assume the role of the buyer, essentially allowing us to buy the stock at the strike price. This type of strategy is used by those investors who are bullish. assume the role of the seller (option writer).

Short Call strategy means you assume the role of the seller (option writer). You sell it before you buy it. This is important as you've now switched the transaction around. As you now make money only if the call option price drops prior to the expiration. Benefits are you get the

you et the money into your account immediately. Okay that is the end to my tweet limit Part 3 on the way. @threadreaderapp unroll #Options #ShortSqueeze #Stonks #Market #Stocks