| Author | Source |
|---|---|
| u/augrr |
🚀🚀🚀 🚀The Shell Game IV – TO THE MOON. Shit or get off the pot edition.
In [Shell Game I] (https://www.reddit.com/r/Superstonk/comments/mvvmvp/time_to_expose_the_shell_game_ftds_can_be_reset/): I showed you how FTDs have been mischaracterized as something that can be “reset”. I also taught you how they are representative of a liquidity issue on an underlying security.
In Shell Game II: I associated the process of arbitration, a way for the MM/AP and ETF Manager to milk profit out of the process of “correcting” the price of the ETF NAV vs the price of the underlying securities, with how the T+2 system can create opportunities for operational shorting. This was important in showing FTDs = A naked short (“phantom share”) created at the time of the FTD.
In Shell Game III: I pointed our sights on the Authorized Participant, who has delta hedged the entire global system into a very precarious position. In this post, I’ll turn my gaze to the other side of the coin.
🚀In my mission to continue to deconstruct months of inaccuracies regarding FTDs, I will state plainly:
A FAILURE TO DELIVER IS A NAKED SHORT POSITION AT THE TIME OF THE OCCURRENCE OF THE FTD.
1 FTD = 1 SHORT POSITION THAT NEEDS TO BE COVERED.
There are two sides to the ETF Creation/Redemption process.
In Shell II, I linked this website for the apes to visit:Â https://www.etf.com/etf-education-center/etf-basics/what-is-the-creationredemption-mechanism?nopaging=1
In that post, I identified an opportunity for the Authorized Participant to remove the underlying securities during the creation stage of arbitration. This would be operational shorting where the “bag” lies in the hands of the Authorized Participant, as they should be reflecting a lot of securities within their portfolios. However, the Redemption side of the arbitrage process affords the ETF Manager to do the same thing! NOTHING is stopping the ETF Managers from hypothecating their own position, much like an Authorized Participant does, and delta hedge down the chain to put the market in a strangle-hold. /u/atobitt has identified the severity of this decision.
The beauty lies in the fact that it is hypothecated. Because it is all bullshit, we need to start calling it for what it is. I am extremely appreciative that there will be an AMA with Dr. Susanne Trimbarth today (https://www.reddit.com/r/Superstonk/comments/n1bles/new_link_for_dr_trimbath_ama/), because I have some questions of my own that I need answered. And it is time for Gary Gensler and the SEC to really focus their attention on this problem NOW before we are delta hedged into a blackhole.
🚀 Not All ETFs are made alike.
ETFs create a liquidity problem in our T+2 system, as my friend /u/LikeJokerDo420 has posted here. I challenged him in the comments because I feel like they are being painted with too broad of a brush. Yes, the ETF Arbitration process is a problem, and the institution needs to quickly think about how they will work for the future, but not all ETFs are made alike.
🚀Boom.🚀
🚀 It is time, ETF Manager.
Like in Shell Game III, I am going to go out on a limb here and speak to the ETF Manager directly:
I have clearly been able to demonstrate that the apes have the capability of seeing your Shell Game for what it is. You understand the game, and I feel like I am getting close to the core of the problem. My 100 shares stand for something more than just Gamestop, at this point. I stand for transparency in the markets and belief in the American Dream. Every second that goes by, firmer and firmer do I stand in my conviction that I like this stock, and that Ryan Cohen is a true friend for all of us who dare dream. On 6/9/2021, I will be standing in the parking lot in Grapevine, at worse, cheering on the company that taught me something about believing in myself.
I have risen above the psychological damage you and your ilk have caused me and have no fear.
It is time to shit or get off the pot.
It is time to cover, ETF Manager. Do not make the same mistake of those from 2008. People are walking out of their jobs left and right this week on social media. You see it right? The wheels of the economy turn in ways you cannot control completely. Have courage to do the right thing. You will love what happens on the back end of this. We have big dreams, and we are ready!
Moon Soon.
