(Part 1) Here's another cat snippet for $AMC
So we are in the beginning of the end.
Many of us know that the higher the share price goes, the higher the collateral would be needed from short sellers to maintain their positions.
So we are in the beginning of the end.
Many of us know that the higher the share price goes, the higher the collateral would be needed from short sellers to maintain their positions.
(Part 2) When a short seller hasn't covered their positions when their shorts were at 10$, their losses are absurd on top of covering interests.
(Part 3) That's why short selling is a high risk / high reward alternative in the market - the potential of infinite downside if there's a losing bet.
(Part 4) If hedgies double down on their shorts at higher prices, their losses are "limited" but they kill their own capital as it take spaces to form a collateral to maintain these new shorts.
(Part 5) Let's assume the latest #Ortex data for the SI to be 102.30M and short sellers have all shorted at 10$ and they have collected a premium of $1.023B.
This math excludes institutions reloading their shorts at higher prices and "hedging against their bets".
This math excludes institutions reloading their shorts at higher prices and "hedging against their bets".
(Part 6) Up to now, short sellers' portfolios have collectively lost roughly $4B.
As per the new rulings of the DTCC, liquidity requirements have increased to 40% for clearing members meaning a collateral of 40% is needed for that short volume.
So 40% out of $4B is $1.6B needed
As per the new rulings of the DTCC, liquidity requirements have increased to 40% for clearing members meaning a collateral of 40% is needed for that short volume.
So 40% out of $4B is $1.6B needed
(Part 7) From memory, let's assume Citadel would be the only hedgie to short $AMC.
From memory, Citadel has a capital requirement of 8% - a bit more than $30B in asset management - meaning they need roughly $2.4B to maintain their assets in place.
From memory, Citadel has a capital requirement of 8% - a bit more than $30B in asset management - meaning they need roughly $2.4B to maintain their assets in place.
(Part 8) Henceforth, Citadel wouldn't allow to burn and exceed $2.4B for their short account at the risk of being pursued by market regulators and credit collectors.
(Part 9) Assuming Citadel would be the only hedgie to short $AMC with the excluding criteria mentioned above.
40% collateral for short volume x 59$ (share price) x 102.30M short interest = $2.414B
40% collateral for short volume x 59$ (share price) x 102.30M short interest = $2.414B
(Part 10) Citadel would go bust at 59$/share on $AMC because they cannot exceed $2.4B of capital unless they would have to alternative holdings to bolster their liquidity.
(Part 11) We know this math is inaccurate because short sellers can hedge against their bets and they are sitting on a time bomb as they run out of capital due to interest payments and securing collateral. They are literally making few dollars, if not pennies of profits on this.
(Part 12) Once $AMC reaches a certain average share price that would basically overwhelm capital requirement of these bad institutions.
It is a rocket departure for Galaxy Andromeda.
It is a rocket departure for Galaxy Andromeda.
Typo: "unless they would have to liquidate alternative holdings"
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