I somehow used the equity line of $30B instead of $407.641B in AUM as of 03/31/2021 for Citadel. I don't want to use Fintel as they often do mistakes on recent filings.
(Part 2) Even I do mistakes - that's why I hire people to do these calculations and peer-review data (STUPID CAT!)
So Citadel having a 8% capital requirement meaning $32.61B to maintain their assets in place.
(Part 3)
40% short volume x 102.30M short interest x 800$ (share price) = $32.736B
Meaning if Citadel would be the only hedgie to short $AMC, if they are not kicking the can down the road by reloading their shorts, hedging against their bets.
They would go bust at 800$/share.
(Part 4) ...Unless they cover first forcing their other competitors to cover later.
That's why the market is a massive never-ending game of chessboard.
Try this with multiple assets and our heads would explode.
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Let's talk about what an investment bank does. It's gonna lay out some foundations and make some pieces clearer on what happened recently with highly shorted securities with the issuance of shares including wealth creation.
(Part 2) Investment banking does three primary functions: underwriting securities, IPO & seasonal offering.
A company wants to issue shares. You need someone to vouch for you to buy a piece of your company. In some way, it's a reputation kind of thing.
This is underwriting.
(Part 3) The investment bank has contacts among people to make offerings worthwhile and they manage this issuance to make sure a company grows with liquidity.
(Part 1) So I've been investigating the bond market and lots of smart money from institutions are betting against it. $HYG is one of those prime examples, being a high-yield corporate bond, representing low-par companies.
(Part 2) These institutions betting against these bonds are Citadel, Blackrock, Morgan Stanley, Citigroup, Jane Street, Goldman Sachs, Susquehanna, Bank of Montreal, Barclays, UBS Group, and more!
(Part 3) How does this affect the squeeze? Unfortunately, it is just kicking the can down the road as the bearish market is eventually inevitable but it's gonna help somewhat our cause.
Disclaimer: Anything under this thread is not financial advice. All of this is based on my professional experience and content here are for educational purposes.
(Part 2) The squeeze is imminent. Technical analysis doesn't work. Prediction models are haywire and inaccurate. Fundamentals are out of the window. Ortex and S3 Partners aren't reliable.
(Part 3) Lately, I've read talks about the 2nd book system. It is real. The 1st book is held by the company registering transactions between a buyer and a seller. The 2nd book is for validation of such transactions between these two parties through a clearing house.
(Part 1) I don't understand this trend of holdings being held/delayed by a clearing house / market-maker.
The truth is they have been doing this for quite some time.
(Part 2) Let's go back to the basics: retail investors submit their orders through their brokerage services at market prices which take within two business days to settle through a market maker / clearing corporation.
(Part 3) Some of the delays are bound with the amount of buyers and sellers based on supply and demand - but also with the amount of wealth being exchanged. If it's a huge order, that might take some time to be fulfilled completely based on existing partial offers.
(Part 1) Anatomy of the bearish market (in a nutshell)
We're supposedly at the end of the bullish market (RED) with inflated stocks with margin, credit, and debt. Some stocks will undoubtedly melt-up (skyrocket) [this year - highly shorted securities are current plays]
(Part 2) Eventually, once the bearish market in in our doorstep - In order to preserve wealth, investors would be buying gold as fiat currency will lose value for gold to pick up in value. They are inversely proportional.
Nothing is gained. Nothing is lost. All is transformed.
(Part 3) On the first step of the bearish market (PINK), investors would be looking out for the true dip of the stock market / real estate and crypto.
Nobody knows when the market will reach the very bottom so be prepared to average down on your holdings.