$RLFTF (trading related) Penny Trading DD by Wong:
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(Total Views: 404)
Posted On: 03/17/2021 1:48:28 PM
$RLFTF (trading related) Penny Trading DD by Wong: Simply put, the new #ShortingRule issued by the NSCC will reduce the ability of the MMs to do what they do in the volume they do it. It will cost them more and reduce their liquidity, reducing how much and how many positions they are in. Below is a detailed explanation
The NSCC and the DTC are both subsidiaries of the DTCC and play a significant part in the settlement and clearing of all securities transactions. They’re the largest providers of this service worldwide and have issued new rule SR-NSCC-2021-801.
SR-NSCC-2021-801 changes how SLDs (Supplemental Liquidity Deposits) are being handled. SLDs are a "down payment". They're part of the rule that governs the settlement of securities of NSPCC members (MMs) should they default. The RULE CHANGE takes effect March 19th.
The NSCC is installing NEW measures at a very convenient time in case Market Maker (MM) members like Citadel (CDEL) default on their short positions. NSCC/DTCC are responsible for keeping the American markets and MMs in check.
The new rule is the NSCC’s way of ensuring they can complete settlements on behalf of its members should they default on their obligation for a security (short positions). The NSCC/DTCC settle the vast majority of our securities trading.
The focus here is on SLDs. The NSCC previously calculated the requirements for SLDs from members no later than five days prior to the option (short) expiration activity period, usually the 3rd Friday of each month. They are now doing it DAILY!
The NSCC will now calculate SLD requirements for MMs EVERYDAY rather than attempting to guess the sum they would require in excess of the NSCC's capital based on the 24-month history built around only the option date. This means more of their money is tied up daily.
NSCC now will take the sum of their(MMs)risk each day subtracting from their available capital, that amount is what the member MUST pay as a deposit. This will result in BILLIONS of $ NOT available to those MMs who are exposed for Billions in OTHER short positions.
This is an acknowledgement that the NSCC members day trades can cause just as much chaos as their options expiring ($GME). The change puts those MMs on the watch list except this time the NSCC would calculate their exposure to the risk of their trades on a DAILY basis.
Here is an example; The NSCC would be required to DEMAND OTCX (currently shorting $VMHG in a BIG way) pay a SLD for the difference in their short position at $1.00 and a price spike of $3 to $4. 10/15--->
If their Naked Short position is at 10mm shares, that's a massive $30,000,000.00 SLD that OTCX would need to produce or immediately cover their short position at whatever price it sits at.
The MM shorts MUST make this payment within one hour of notice! That’s on (1) ticker, and they are shorting hundreds and/or thousands of tickers at any one time. This rule change could leave those identified with literally NO FREE CASH for that day.
This change is so far-reaching that previous shorting techniques will no longer be as effective. There are new rules for the suits and MM manipulators! Shorting, especially Naked Shorting, just became WAY more risky and expensive for the MMs.
(copy) from Ya-h00
The NSCC and the DTC are both subsidiaries of the DTCC and play a significant part in the settlement and clearing of all securities transactions. They’re the largest providers of this service worldwide and have issued new rule SR-NSCC-2021-801.
SR-NSCC-2021-801 changes how SLDs (Supplemental Liquidity Deposits) are being handled. SLDs are a "down payment". They're part of the rule that governs the settlement of securities of NSPCC members (MMs) should they default. The RULE CHANGE takes effect March 19th.
The NSCC is installing NEW measures at a very convenient time in case Market Maker (MM) members like Citadel (CDEL) default on their short positions. NSCC/DTCC are responsible for keeping the American markets and MMs in check.
The new rule is the NSCC’s way of ensuring they can complete settlements on behalf of its members should they default on their obligation for a security (short positions). The NSCC/DTCC settle the vast majority of our securities trading.
The focus here is on SLDs. The NSCC previously calculated the requirements for SLDs from members no later than five days prior to the option (short) expiration activity period, usually the 3rd Friday of each month. They are now doing it DAILY!
The NSCC will now calculate SLD requirements for MMs EVERYDAY rather than attempting to guess the sum they would require in excess of the NSCC's capital based on the 24-month history built around only the option date. This means more of their money is tied up daily.
NSCC now will take the sum of their(MMs)risk each day subtracting from their available capital, that amount is what the member MUST pay as a deposit. This will result in BILLIONS of $ NOT available to those MMs who are exposed for Billions in OTHER short positions.
This is an acknowledgement that the NSCC members day trades can cause just as much chaos as their options expiring ($GME). The change puts those MMs on the watch list except this time the NSCC would calculate their exposure to the risk of their trades on a DAILY basis.
Here is an example; The NSCC would be required to DEMAND OTCX (currently shorting $VMHG in a BIG way) pay a SLD for the difference in their short position at $1.00 and a price spike of $3 to $4. 10/15--->
If their Naked Short position is at 10mm shares, that's a massive $30,000,000.00 SLD that OTCX would need to produce or immediately cover their short position at whatever price it sits at.
The MM shorts MUST make this payment within one hour of notice! That’s on (1) ticker, and they are shorting hundreds and/or thousands of tickers at any one time. This rule change could leave those identified with literally NO FREE CASH for that day.
This change is so far-reaching that previous shorting techniques will no longer be as effective. There are new rules for the suits and MM manipulators! Shorting, especially Naked Shorting, just became WAY more risky and expensive for the MMs.
(copy) from Ya-h00
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