Moronic iHub admins removed my daily TECO post
Here is what it said. I singled out the MM's and of course iHub is a crooked website so they removed it in order to protect their bosses.
MM's risk management desk should update their resumes
Many of us here, myself included, own more shares of $TECO than what was traded today. Bears attacked early and then late in the lunch period to work the price down today. The final print was just below the 200 DMA which is meant to keep them from getting annoying phone calls from the margin desk first thing in the morning tomorrow about how they have been out of the money on this trade for a month and that they will be forced to liquidate soon if they try to go into the weekend with a 50% out of the money position. This is not a break of that support level by the way.
If you were paying attention to the level 2’s today you saw that VFIN and ATDF took over the role as lead ask sitter as price ratcheted lower towards the end of the day. My guess is that the parties responsible for shorting the stock have already reached or are near reaching their margin limit and are switching MM’s like a debtor switching between credit cards as they get closer to the debt limit or maxed out altogether. I think that the bulk of the shorts may be held at CSTI, also known as Collins Stewart, an offshore market maker who is also a subsidiary of Canaccord, a Canadian financial services firm. They have been the most active over the last couple of weeks at playing the role of lead ask sitter while waiting on bid close or closest to price.
It is important to realize that the risk management portions of financial institutions exist many times only nominally, and when push comes to shove management will very often side with the “profit center” thereby taking on the risky trade that the “cost center” warns could lead to massive losses.
That is what happened throughout the housing bubble when excessive leverage was taken on long and eventually wrong bets on CDO’s. It is also what happened with JP Morgan earlier this year when “hedging out” their exposure to an index that they were singlehandedly buying up. I would be willing to bet that Knight didn’t make an “erroneous trade” but rather just plain bet wrong and got their faces crushed even though someone inside the firm probably raised the issue but got shouted down.
Investment committee meetings are not that much different from the school yard where the loudest a**hole can sway people much better than the bumbling nerd.
As any of us can plainly see, the security is severely mispriced. TECO is trading right now where it was before the market knew a damn thing about the Shelby lease, and obviously before we had certified TRCC docs and youtube videos showing oil production.
If I were the risk management nerds working for the MM’s or hedge funds naked shorting TECO, I would be updating my resume and looking to get as far away as possible from this catastrophe before the defecation hits the fan and my reputation is destroyed.
[IMG]http://i.imgur.com/fgDvJ.png[/IMG]
