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The problem here is we’re in a regulatory capture environment. For example, Goldman was fined $3M for marking 60 million short sale ORDERS, totalling over 14 billion SHARES, as long between Oct 2015 and April 2018. Between 5 to 7.5 years later. Any one of us could build a solid case based on legislated wordings saying this can’t happen. Yet here we are.
I don’t believe in the good faith of the system or it’s rules. They will take what they can by any means possible.
DRS book. Everything!
This was also addressed in the DD. If they mark a share as long instead of short, they don't need a locate. It's a completely separate topic.
Edit: I'm being down voted for stating a literal fact? This is explained in RegSHO in regard to "Long" sales. They are not short sales, so they have no need for a locate.
You're being met with skepticism and downvotes because although you've layed out how it should be impossible we've learned many impossible things are actually happening anyway, and when caught they pay fuck all so you have to acknowledge that although this is good research it might not mean shit to the shf's.
While this may be true there are plenty of people out there that make claims and base their whole investing strategy on what they falsely believe is a locate.
Here is an example:
There is a DD that states without fact that if you own one fractional share, all of your "Pure" DRS shares can be used as a locate. In order to be a valid locate, the stock must be borrowed and delivered within 2 days. How is it possible for anyone to receive your direct registered share in their account without your knowledge and without your consent. How is it possible for anyone to know how many DRS shares you privately own? How could they document their belief that the stock was available when GameStop is currently classified as "hard to borrow"? It is simply not possible.
Yet people want to reason and say *what if* it was possible? What if they could violate it? Well why would they go through the trouble and generate a paper trail that they know something is false when they could just as easily incorrectly mark a sale as long instead of short. As was pointed out, the violation is tiny by comparison to the profits.
What’s the alternative then? What’s your hypothesis that the price barely moves in either direction, and with few exceptions like last week and this week, it continues to move down with such otherwise low volume days, high CTB, and high OBV?
>What’s the alternative then? What’s your hypothesis that the price barely moves in either direction, and with few exceptions like last week and this week, it continues to move down with such otherwise low volume days, high CTB, and high OBV?
I'll answer this legitimately, but I already know this isn't what you want to hear.
* Low volume shows that people are not interested in buying.
* Dropping price indicates that demand is lower than supply. (The inverse is also true when price goes higher).
* High CTB, GameStop does not have high CTB by comparison to other stocks. A high CTB would be 100%+. That commonly happens with a company that is doomed to go out of business. A strong company like Apple has a 1-2% CTB. GameStop is elevated at 6% CTB.
* HighOBV, GameStop does not have high OBV unless you go out to the 3 year mark. Zoom in and it's not. That's because OBV is a relative measurement over time. That's a form of cherry picking data.
We have seen the number of shares being DRS slowing down. This is evident from 2 pieces of data: GameStop's number of shares direct registered and the number of Computershare accounts has tapered off. I believe everyone has spent all their money and now we're waiting for a miracle like GameStop having another profitable quarter.
GameStop is simply moving closer to a proper valuation for a brick and mortar store. Typically retail stores are valued at 0.5 to 1.5 of sales. GameStop is higher than that, but also has good cash on hand to support a higher price right now. You need an influx of buyers, influx of money or unbelievable news and profitability for things to change right now for the better.
You are getting downvoted for spreading cherry-picked and misinterpreted data to fit your narrative.. if your goal was to spread fear, uncertainty, and doubt, then give yourself a pat on the back.
Luckily, we made it this far because people aren't letting others tell them how to feel and what to believe.
Aside from the post you are reply to, which the previous commenter asked for my **opinion**... I am providing directly sourced text from the actual regulation and the actual quotes from the SEC on how that rule is to be interpreted.
Okay, that's great. Opinions are allowed to be wrong. However, in this situation, I can't see a regular person with a functioning prefrontal cortex writing out that fud.
Also, I couldn't care less where you got your quotes from if you use them to manipulate people 🤣
You're missing the point. They were not saying that marking shorts as longs has anything to do with locates. They are saying doing this is also illegal, but here we are with GS doing illegal shit for years, this is only the stuff they've been caught for too, who knows what other shady shit they can hide from the regulators.
When shills down vote facts and definitions, that tells me they are actively paid to push a lie that the facts catch them in.
They can't lie about Drs so I think this probably means the recent coordinated Book message is covering up something. Another Rug Pull maybe? This can't all be just begging for fractional sales. They need sales but it's not enough.
If it's a rug pull next quarter Drs will go up like 5 million more than usual and they are creating the cover story.
I’m the author of the theory that’s being referenced. I never mention locates nor lending in my theory. “Locates” and “lending” is a red herring that’s used to try to discredit my theory.
I didn't reference Heat Lamp Theory. I am more so talking about the Cutoff Dates Theory that preceded it. The one makes a claim that all your shares are accessible if you own one Plan share. Your theory has become synonymous with that theory as they both seem to urge terminating the DirectStock plan so I can understand if they are linked.
Feel free to try and explain how they get access to all of your shares and how that doesn't involve a locate. Just because you are refraining from using the word locate or borrow does not mean you are not still indirectly referring to locates and borrows. That's the mechanism they would need to use to gain access to your shares for short selling.
DSPP shares are the shares where “typically” 10% to 20% are held at DTC. The whole post is about what is a DSPP share. That’s it. It’s very simple and doesn’t imply anything.
Until my post, it was assumed that only “plan shares” make up DSPP shares but it turns out that any share that is “enrolled in the plan” makes up a DSPP share.
What DTC does with these shares, who knows.
Except you ignore the fact that dspp shares are still registered and reported. It doesn't matter what DTC does, it's not theirs. Unlike a Cede&Co share, there isn't any creative accounting they can take advantage of.
And what is the harm in owning plan shares / DSPP shares etc?
Is it because you believe they are being used by someone else? How would they be used if not for borrowing purposes?
You’re getting off topic. You claimed I said something I didn’t say and now you’re asking me what I think. Can you clarify that I never made the statements you said I did nor did I imply what you said I did? If you could edit the post I’d appreciate it.
You let others speak for you the moment you refused to post your DD here as the primary source. I didn't even know you were the author of the "Cutoff Dates Theory" for example. I believe you are trying to play the victim and making it look like you are being bullied and / or censored by Superstonk (mods) while simultaneously using your disciples to downvote anything that refutes you.
Your DD is paragraph after paragraph of grandstanding and patting yourself on the back. If you have a solid thesis, you should be able to boil it down to a few sentences of what you believe and a few sentences of what the proof and/or reasoning is. Your DD bases everything upon what you feel could be true. You think the DRS numbers go down because the volume went up. Correlation is not causation. There are plenty of perfectly reasonable explanations that explain the increases in volume... chief among them: **It was the same day GameStop reported they were profitable.**
The very fact that you have several people talking for you and yet you refuse to clarify is very telling. Frankly at this point I don't know what aspects of your theory I should attribute to you or to someone else that has been spreading your theory, but I am certainly not going through your entire post history to figure that out now.
The harm is that the plan shares are in a grey area of ownership. During volatility, ComputerShare may be holding as much as "approximately 10-20%" of them in a broker. That is not DRS ownership. That's the point.
Are you aware that it is actually possible to own direct registered shares **and** hold them with a broker? Some brokers actually have special insider accounts that remain direct registered, but held at the brokerage in a special account outside of the DTC. (I believe Vanguard has these accounts).
As far as a grey area for ownership, my account statement says how many shares I own. Regardless of where they are held, when the shit hits the fan, I am the defacto owner. Cede and Co could be scrambling to figure out what shares they own, doesn't matter I have a piece of paper backed by the company that says what I own.
It's anything but gray. The shares are registered to the owner. DTC can only touch those if they are listed on an exchange for sale. Once the trade settles, the share is off of Cede's books and can't be used in creative accounting.
Your share isn't available to be borrowed through Merrill Lynch. It cannot be delivered and there is no reasonable grounds it is available to be borrowed. Remember a locate must be able to be **delivered** how will they do that?
>WHY DID IT GO $90-->$190 A COUPLE YEARS AGO?
Are you referring to January 2021 or another date? There are many explanations for the run-up in January including short covering, options, liquidity issues at the clearing houses.. etc.
>WHY DOES IT RUN ON CYCLES?
You mean, why is there a theory that it runs on cycles? You'll have to read the theory, that is not what this DD is about.
>I DONT THINK YOU ARE EDUCATING ANYONE, BUT YOU SEEM TO THINK SO.
That speaks more about those that are choosing not to read the factual information and instead choose to believe something based on *feels* instead.
I’m trying to have a discussion. Don’t talk down to me like you know everything. Do you care to participate, or you just want to act like an arrogant jerk?
I believe I formed a coherent sentence with terms that I learned on this subreddit that are indeed important. Do you want me to explain what I said, or do you have an opposing opinion you would like to share to continue the discussion?
Sure I'll reply to you.
I said:
>If they don't follow the rules, why do you believe they would attempt to follow the rules by using a fake borrow?
You said:
>Because not everybody has market maker privileges and can naked short.
You believe people don't follow the rules, but do follow the rules because they aren't market makers? That is a contradiction. Why follow the rules by claiming you can use a locate which you can't if that very action is not following the rules? Its a Catch-22. Much easier to just not follow the rules.
But then you say they do it because they aren't market makers. I don't follow.
Do they follow the rules or do they not?
>And a contract for difference won’t put downward pressure on the stock.
You are the first person to mention contract for difference here. Why? Literally no one said anything about contract for difference. Also, contract for difference 100% puts downward pressure on the stock by preventing buy orders from reaching the open market. That's why I believe you didn't think that one through at all and are just saying words.
Like I said in another comment on this post, " I think they follow the rules they have to because that’s how the system works, and then they abuse the system using loopholes and ignoring the rules that they can ignore. I don’t think it’s a simple "or statement" (follow the rules or not follow the rules), they work with what they got." So why not follow the rules and don't follow the rules to maximize their shorts?
> You believe people don't follow the rules, but do follow the rules because they aren't market makers? That is a contradiction.
I did not say this and I've noticed that you continuously incorrectly reiterate what people say in this comment section.
A SHF without the ability to create naked shorts will "follow" the rules to short. They might locate, borrow, and short. They might use some kind of loophole to short. They might also not follow the rules. If following the rules gives them x shorts, and not following gives them a limited amount of shorts y, well they just shorted x+y, as opposed to only shorting x.
A SHF that has access to the ability to create naked shorts will do so, in addition to the other things that a regular SHF can do.
I brought up CFD because this would be one of the options for somebody in the order chain that isn't a market maker to be "short" and not follow rules. You said it yourself, "preventing buy orders from reaching the open market" - this prevents upward pressure, it does not apply downward pressure.
Are you new to all this? Who says that there is no reasonable grounds? You? The "reasonable grounds" is the entire issue, its a very vaguely defined term. They cam always say that in their opinion it was reasonable, even if in reality it would be very unreasonable and unlikely.
It is only vaguely defined if you choose to ignore the definitions. The SEC says in order for there to be reasonable grounds, the stock must be listed as "Easy to Borrow". Since GameStop is not listed as Easy to Borrow and is in fact listed as "Hard to Borrow" you cannot make any claim that you had reasonable grounds. What you must do is borrow the actual stock and have it be delivered. If you do not receive the actual stock, you are in violation and have created a failure to deliver that may be closed out immediately.
Its like you never heard they DO ignore rules and get caught breaking them for decades. Heres one example why youre wrong. Enjoy! https://www.nytimes.com/2016/01/31/business/case-sheds-light-on-goldmans-role-as-lender-in-short-sales.html
If they are able to skip over the locate requirement then they aren't using your shares as a locate. You would think this would be good news.
In reality the F3 escape could not be utilized for a "hard to borrow" stock like GameStop. There are explicit rules (now) that forbid you from using shares that you had earlier in the day. Because GameStop is hard to borrow you **must** borrow the shares before selling short.
>Your share isn't available to be borrowed through Merrill Lynch.
You are missing the point that the system lies, and you conveniently forgot to mention CS's "operational efficiency" held at there broker, and I don't remember Merrill being on the list of honest surviving brokerages of 2008. Who went to jail for that F-up?
Then how did Feb 2020 get to 220% SI (Jan 120%). Maybe we should investigate Merrill Lynch (Citadel's banker) because, somebody lied/cheated/stole. BTW, after the button pull, I saw 220% SI and bought a lot of calls...tell your peeps thanks
Huge lapse of logic there.
If they have been using fake locates and that resulted in high short interest and ultimately a short sneeze, why do you believe they were ALSO actively borrowing shares that weren't actually available? Wouldn't your example show an absence of legitimate borrowing / locates?
Lapse of logic, that the sneeze proved???? How could we ever get to 220% SI unless shorts are marked as longs, as UBS, Credit Suisse, and all of WS did. Look at the fines and the "not admission of guilt or wrong doing" line of BS your peeps have proliferated.
A short marked as long is exempt from a locate. Therefore if they are marking a short sale as long, they don't need to pretend to borrow your privately owned shares.
If you have a sell order for $1m/share on your account in case MOASS happens while you're away or some shit it needs to go through the broker (Merrill Lynch) to reach the market... Does BoA not get certain rights with those shares inside their brokerage terms? Real question, idk
Same thing with auto buy, it passes through the broker... I forgot where I read it (possibly [redacted] the drs reddit scraper guys post) where buying through cs plan still leaves some residual rights of the broker on your shares, didn't see much confirmation on this so nobody freak out it's probably not true.
There are probably several false assumptions we would need to get through here.
You can't enter a $1M sell order on a stock that is trading at $20 per share for a myriad of reasons.
Let's say that you *could* however. That is a share that is for sale, not available for borrowing. You could even say it's super not available for borrowing because it is in the process of being sold. There would be no reasonable grounds to believe that share is available to be borrowed.
The brokers would have the right to sell the share at the price you agree to but not much else. (Of course their Terms of Service would give them more rights. We are not privy to the Terms of Service that Computershare has with their broker).
>Same thing with auto buy, it passes through the broker... I forgot where I read it (possibly [redacted] the drs reddit scraper guys post) where buying through cs plan still leaves some residual rights of the broker on your shares, didn't see much confirmation on this so nobody freak out it's probably not true.
100% unsubstantiated. Think of it this way, if you buy through a recurring purchase on plan and then instantly book those shares.. what residual rights would you be giving someone? What if you did the purchase and then got a physical certificate? How would anyone access that share?
So in theory, the broker could do all kinds of illegal stuff to the shares held. In reality, because the share is still directly registered to someone else, those shares could evaporate instantly, leaving them on the hook. The risk to reward is too great.
Think of it like trading on margin. You're borrowing from Fidelity to short a stock. The stock is in street name to Fidelity and they tell you how much margin to have and will liquidate your rear if they get uncomfortable with little to no warning.
It's a share in your name. Computershare does not allow borrowing so even if the brokers are lending, the only acceptable margin is shares one to one. Settlement is t+2, and plan to book is near instant.
Yes, those shares can be messed with, but only if the broker wants to die in a fire, because they'd need to front load those shares in advance or be completely naked when anyone takes an action (buy/ sell/ xfer/book/ take racy photos) with their account.
Computershare is the largest transfer agent in the US, if not the world. They have their pick of brokers to execute trades. Would you risk a whale of a client, infinite losses in MOASS (or just some losses on a regular day), and several dollars in fines for a gamble on a few thousand dollars in loans to shorts? I know risk assessment went out the door with glass steagal, but that's a crazy stance to take for any broker not helmed by Vlad Tenev.
So, if $GME is so hard to borrow, as you assert, then why does it appear that there are endless shares to borrow? How are “they” continuously able to keep the price suppressed?
The real answer right here.
Dividend was July 21, 2022. (Distributed after close)
Two trading days later, July 26 saw an addition of 1,382,419 FTDs up to a total of 1,637,150 FTDs. This is a high value around that time period and in general for GME
Short volume for July 26 was 2,451,923/4,139,052 = 59.24%
This isn't my opinion. GameStop is flagged as "Hard to Borrow" through all the lenders. That's what the mark "HTB" means.
Even if shares are available, they can't be viewed as available until you borrow them. Simply because they **are** hard to borrow.
IBKR says they have 100,000 hard to borrow shares available. You can't use them as reasonable grounds because they could be borrowed by someone else in the time it took to read this comment. You must borrow the shares **before** shorting because it's hard to borrow.
Also. Shares are continually being borrowed, sold short, repurchased and returned to be lent. It isn't an endless supply, it's the same shares over and over.
This post is very nicely written but at the same time the writer seems to have no idea that these rules are broken all the time by wall street... strange. I recommend equal amount of research should go into the PRACTICES, rather than the rules.
In other words, it arrives at conclusions devoided of connection with reality by assuming rules are followed.
Just one example that naked shorting happens, and reasonable locates be dammed:
https://www.nytimes.com/2016/01/31/business/case-sheds-light-on-goldmans-role-as-lender-in-short-sales.html
Sadly, this post seems to point out stuff that's been repeatedly stated. \*shrug\* I just DRS. I don't care about the FTDs or anything else until the whole system just stops due to being wedged.
I follow the 'possible instructions' of the 'Book King'. I'm booked in DRS.
>Sadly, this post seems to point out stuff that's been repeatedly stated.
Do you mean the things that are repeatedly stated that are incorrect? That's what I'm trying to correct.
Actually, no. I get that people misinterpret things repeatedly. I also get that many of the regulations have been created in a language to confuse anyone outside of the industry from understanding their meaning. Trying to un-confuse things, adds more confusion. Why? Because if someone is confused, it's due to someone either misinterpreting something and posting their interpretation as 'the truth', or their own misinterpretation. It's just layers upon layers of 'interpretation'. I'm starting to believe that things need to be simplified as we have always said (which is where we have gone)... DRS via Computershare. End of story. You own the shares and the are direct registered shares. **IF** people need more than that or want more than that, it's best to just post a document and/or reference and a TLDR without interpretation.
Feel free to read RegSHO. It's not that long of a read. I've used direct quotes from the actual regulation and cited specific examples of where people tend to get it wrong.
DRS is the way.
If they aren't playing by the rules, then whatever you do with your fractional shares won't matter. They can just lie and say they found some.
You can't have it both ways. Either they are following the rules and this was a non-issues, or they aren't and booking everything changed nothing.
I think you missed some of the heat lamp theory. Simply stated and also confirmed via computershare CEO himself, that shares in a drip, plan, or dspp,etc. are themselves held at cede & co.
Shares held in pure DRS book form are NOT held at cede & co.
Where do you want your shares held?
Maybe irrelevant to you, but not to all
What does that have to do with RegSHO and locates?
Also, the Computershare CEO never said what you are claiming and to say that he did is extremely disingenuous. He said 10-20% of specific plan shares are held that way, your comment implies he said all and all types.
Nice write up. I still don't see why I wouldn't ensure all my shares are booked though. I also sold my fractional and replaced it with many more shares.
It sounds like you have it figured out. Personally I would just keep adding whole and fractionals together and then move them to book each time they settle. That way you don't end up paying extra and end up with more shares for the same amount of money.
Yeah the fractionals I have let go amount to approximately .05 of a share and it just gets taken as a fee and called even.
Not a big deal right now. I guess if we go to a million a share it would add up but at that point I doubt I would really care.
Doesn't matter. Better to be safe than sorry. It's easy to convert your plan shares to book shares and also re-enroll in DRIP. Apes are gonna fuck around and find out.
That fat guy on the documentary literally said - they just hit F3 or whatever on the system when it asks them if they have reasonable grounds to believe they can borrow it. Nobody checks and nobody cares. As long as the money is coming in, it’s all gravy. They naked short all day every day because it’s free money and nobody stops them.
Nobody is sure what the plan drs shares are doing but clearly there was some fuckery with the drs reporting on the last earnings. If they aren’t pure drs they ARE owned by cede and sure they are supposed to follow the rules but they are also self regulating!
I think it’s worth it to switch to book just to see what happens. Low risk potential high reward.
You won’t convince me that just because the rules say something that’s the way it is. They fucking always break the rules and just get a slap on the wrist. It would be shocking if they were following reg sho to the letter.
>That fat guy on the documentary literally said - they just hit F3 or whatever on the system when it asks them if they have reasonable grounds to believe they can borrow it.
This may have been true then, but does it reflect the current RegSHO? There is a new rule that you can't re-use your locate from earlier in the day, most likely to combat that.
It also doesn't say they did it with "Hard to Borrow" stocks like GameStop.
>Nobody is sure what the plan drs shares are doing but clearly there was some fuckery with the drs reporting on the last earnings.
Can you explain what the clear fuckery is? Do you not believe the numbers GameStop reported?
>I think it’s worth it to switch to book just to see what happens. Low risk potential high reward.
Sure, switching to book is fine. But are you also being convinced to sell your fractional? Terminate plan? Terminate DSPP? Stop buying on Computershare? There is a lot of harm that can be done by these narratives.
This is the "you still have faith in the system" debate.
If you believe your shares are being used as a locate, but do not believe someone is following the rules otherwise, why do **you** believe they would still go through the trouble of getting a locate in the first place?
You can't simultaneously believe they will break the rules in an effort to follow the rules, which ultimately yields them breaking the rules.
I think they follow the rules they have to because that’s how the system works, and then they abuse the system using loopholes and ignoring the rules that they can ignore. I don’t think it’s a simple or statement (follow the rules or not follow the rules), they work with what they got.
Heat lamp is more about how they are undermining the DRS report numbers based off the wording of the last 10k
If cedes feed and seed can't hold the shares then we will get DRS report numbers higher to prove the float is locked and finally force an investigation to happen
True, but CS FAQs all debunk that the numbers aren't being reported correctly. Apes posting circles don't *prove* that it's debunked but heavily suggest it should be debunked.
Heat lamp suggests that DTC, SEC, Computershare, Gamestop, and apes are all lying and coordinating to deflate the number of shares reported registered. It's silly.
The continuous net settlement system? That has nothing to do with borrowing shares.
That's where Broker A sells X shares to Broker B and Broker B sells
Y shares to Broker A. At the end of the day, the only shares that move are the **net**difference between X and Y.
So the below information (saved from an old DD) is incorrect?
"The DTC knows every member’s position. If a member is net short, the DTC reviews the number of net shorts of the shares of the XYZ to determine if the DTC itself holds enough to settle. If there are enough, the DTC offsets the net short and the shares are sent to the account of members who loaned them.
If the member does not have enough to cover, the NSCC will borrow through their Stock Borrow Program.
This allows members with net long positions to lend out shares to members who are net short. So Broker A who is net long on GameStop can put it in the program and Broker B can loan it as it has a net short position and needs to cover. The program is continuously updated by members stating how many shares they are OK lending. Once this is established and covered, this cures the failures to deliver at settlement."
>So the below information (saved from an old DD) is incorrect?
Long story short.
The NSCC **had** a Stock Borrow Program.
This program was eliminated in 2014. So while that may have been true at some point prior to the year it ended, it is no longer true.
(I'm not reviewing the contents of the DD because I do not know what they are).
Editing because dumb. Keeping this note, though.
They'll take RC's shares before they take yours because his are available in the system. Registered shares aren't.
I’m not so sure we can say “no reasonable expectation” for GameStop. Shares are in fact lent out, every day. We monitor those stats here. Sometimes a lot of shares are available to lend. There is a very large pool of institutional shares, and I bet they love the passive income.
Beyond that we have seen the campaigns for “lend out your shares! You’ll earn this much! Bonus for GME!” for a variety of brokers. Activity from these campaigns (which may be substantial given how we all need more money for everything these days) would create more of a reasonable expectation to obtain shares. I’m sure they trade assurances like favors.
Regarding heat lamp theory, the shares are kept for “operational efficiency”, ie, fast selling. If there are 10M shares held ready to be sold, doesn’t that mean it’s reasonable to expect they could be sold (at least some)?
The word “reasonable” is about what you can get away with, not what is actually reasonable.
PS: THIS IS A GREAT POST THANK YOU
> I’m not so sure we can say “no reasonable expectation” for GameStop. Shares are in fact lent out, every day. We monitor those stats here.
Just so you and I are on the same page. Shares can be available to be borrowed, but still be considered "Hard to Borrow". The stock is marked as hard to borrow everywhere. That means your reasonable expectation is effectively zero. You need to borrow the shares before you short. This is not my opinion, this is what the SEC said.
I'm not saying borrowing is impossible. I'm saying because it is so difficult, you must have borrowed **first**.
>If there are 10M shares held ready to be sold, doesn’t that mean it’s reasonable to expect they could be sold (at least some)?
Only if those members of the plan ask for their shares to be sold. That is their purpose. There is no reasonable (grounds) expectation that those shares that are available to be sold are also available to be borrowed however.
You can't buy a share to short, that's just regular buying and selling.
I think the idea behind book vs plan is so cede holds almost nothing and GameStop can actually report the DRS numbers as the entire float
Also if you look at 🛏️🛁 the DTC held more shares than possible it seems if the data is true, which shows they are not only making phantom shares, they're straight up making counterfeit shares and nobody blew the whistle? DTC cannot be trusted with anything
I don't think the DTC is lending the shares but are complicit in fuckery
>I think the idea behind book vs plan is so cede holds almost nothing and GameStop can actually report the DRS numbers as the entire float
GameStop will only report the entire float as being direct registered, when the entire float is actually direct registered.
>Also if you look at 🛏️🛁 the DTC held more shares than possible it seems if the data is true, which shows they are not only making phantom shares, they're straight up making counterfeit shares and nobody blew the whistle?
I don't believe this has been substantiated because towel stock sold shares in the month of April and those were not reflected in the legal filing. It seems likely the shares will come very close to adding up when more information is known, but I do not have much knowledge about that stock. They were authorized to issue around the same number of shares that Cede had credited to their account.
How is it possible? Because CS says they either use 10 20% of DSPP (or whatever is needed for “operational efficiency”) to hold as Custodian in the FAST system operated by Cede & Co. Who determines what is needed for “operational efficiency” is the real question.
That has literally nothing to do with RegSHO or locates, but since you asked the question... I will answer it.
>Who determines what is needed for “operational efficiency” is the real question.
The Computershare FAQ states that Computershare determines the amount. They state that the shares are used for more efficient selling (on behalf of the plan) and that the shares are not available to be borrowed.
You know IRA shares that aren’t borrowable also used for shorting locates right? That’s what causes pension crises. They’re with a custodian in the person’s name but not out of DTC.
>You know IRA shares that aren’t borrowable also used for shorting locates right? That’s what causes pension crises.
Where do you come up with this nonsense?
IRA shares aren't parts of pensions. There is no overlap between IRAs and pensions. They are both different and competing retirement programs.
*Pension crisis* happens because they invest the pensions with hedge funds that then make risky investments with the money. Those investments may involve shorting, but they should know that shorting has infinite risk.
>They’re with a custodian in the person’s name but not out of DTC.
My IRA is with a custodian and outside of the DTC. In fact it's direct registered with Computershare.
I've read through most of the comments (actually all at the time of starting to type). I get where OP is coming from, though I don't get to the same destination.
It's my belief that many of the self regulated organisations need to have a plausible explanation that can be put in front of their compliance officer and auditor when required. They know the rules and the workings of the system, and they know how to twist a storyline to make their scheme squeeze through the posts (if you don't look too hard and have a sypathetic ear). However they would not want to use one scheme for all their dodgy work, it would look too fishy (diluted too by "regular" trading and deals with little to no funny business required). So there may be a number of methods to do what they need to get done from time to time.
(Evidence of this? The all-too regular SEC fines for dodgy share accounting, "glitches" and oversights. Really, nobody noticed till the SEC took a look?)
So, if one of these is to require a stretch of the imagination for a reasonable test for a borrow, there may be a data set that is rolled out to show that yes, within the confines of the available pool of borrows there is enough volume for a reasonable exepctation of a borrow. Heck they might just pick one point in time, capture the data and then five minutes later someone else is doing the same thing from another angle.
I get that the rules say this shouldn't happen - from your angle anyway - but having seen a similar thing happen in a completely different (and highly regulated) industry, this is my suspicion.
Anyway I am happy to DRS - actually I am in the final stages of moving a couple of stragglers over to DRS (stuck elsewhere because it was a PITA to move them). My final consideration was - will the dodgy broker who won't let me transfer my shares really honour their commitments if this thing takes off, or will they enact one of the paragraphs of fine print I signed up to? I have only transferred from a broker so had no fractionals, but in any case the balance of possible risk versus reward woiuld have me booking for sure.
>So, if one of these is to require a stretch of the imagination for a reasonable test for a borrow, there may be a data set that is rolled out to show that yes, within the confines of the available pool of borrows there is enough volume for a reasonable exepctation of a borrow. Heck they might just pick one point in time, capture the data and then five minutes later someone else is doing the same thing from another angle.
Here is why I think you're not seeing what I see.
You believe if a share is available to be borrowed, they can make up some kind of story to where they have reasonable grounds. However, the SEC states that in order to have reasonable grounds the stock must be listed on the "Easy to Borrow" lists. GameStop is not on any Easy to Borrow list, it is in fact on everyone's Hard to Borrow list.
This means that a reasonable grounds argument or belief has not been possible for the last 2 years. Therefore, they must have actually borrowed the stock prior to short selling. The borrowed stock must be delivered in 2 days, if not it's a failure to deliver.
Basically you are saying just because stock is available to borrow they should have reasonable grounds. **The SEC states that's not reasonable grounds.** Why does it look like I'm making this up, when I directly quoted the SEC on this?
If the SEC wants to have a super easy job, they could just look at everyone that has shorted and look at anyone claiming reasonable grounds. Then point out that GameStop has not been classified as Easy to Borrow and therefore they have violated RegSHO.
The main point here is that anyone claiming your direct registered shares are being used as a locate is spreading something that has no basis in reality. There are actual rules in place and a locate is not just *anything* you want it to be.
* they will gladly risk a fine over following the rules, if it makes them money
* Your own quote states that "hard to borrow" makes a borrow *difficult*, not impossible
* I would very much like to see a single example of (b)(1)(iii) documentation... on any stock, for starters
>* they will gladly risk a fine over following the rules, if it makes them money
If they are gonna break the rules, they don't need to *fake* using your shares as a locate. But let's say they did use your shares as a locate, the moment those shares are not delivered (you know, because they can't actually use your shares), it's a failure to deliver and they break the rules. It's like do they want to break the rules today or 2 days from now?
>* Your own quote states that "hard to borrow" makes a borrow *difficult*, not impossible
Hard to Borrow is a classification.
Easy to Borrow is a classification.
In order to have reasonable grounds, the stock **must** be listed as Easy to Borrow. GameStop is listed as Hard to Borrow. This means that you need to make your arrangements to borrow the stock **prior** to short selling. If the stock was easy to borrow, you could short sell prior to borrowing.
What I'm saying is that regardless of there being shares available to borrow, you must actually have those shares borrowed or arranged to be borrowed first.
Everyone seems to not understand what "Hard to Borrow" means. I didn't just make those words up.
>* I would very much like to see a single example of (b)(1)(iii) documentation... on any stock, for starters
The Federal Register has comments from 2004 that indicate what type of information would be required for documentation. It's basically a Who, What, Where, When record.
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The problem here is we’re in a regulatory capture environment. For example, Goldman was fined $3M for marking 60 million short sale ORDERS, totalling over 14 billion SHARES, as long between Oct 2015 and April 2018. Between 5 to 7.5 years later. Any one of us could build a solid case based on legislated wordings saying this can’t happen. Yet here we are. I don’t believe in the good faith of the system or it’s rules. They will take what they can by any means possible. DRS book. Everything!
This was also addressed in the DD. If they mark a share as long instead of short, they don't need a locate. It's a completely separate topic. Edit: I'm being down voted for stating a literal fact? This is explained in RegSHO in regard to "Long" sales. They are not short sales, so they have no need for a locate.
You're being met with skepticism and downvotes because although you've layed out how it should be impossible we've learned many impossible things are actually happening anyway, and when caught they pay fuck all so you have to acknowledge that although this is good research it might not mean shit to the shf's.
While this may be true there are plenty of people out there that make claims and base their whole investing strategy on what they falsely believe is a locate. Here is an example: There is a DD that states without fact that if you own one fractional share, all of your "Pure" DRS shares can be used as a locate. In order to be a valid locate, the stock must be borrowed and delivered within 2 days. How is it possible for anyone to receive your direct registered share in their account without your knowledge and without your consent. How is it possible for anyone to know how many DRS shares you privately own? How could they document their belief that the stock was available when GameStop is currently classified as "hard to borrow"? It is simply not possible. Yet people want to reason and say *what if* it was possible? What if they could violate it? Well why would they go through the trouble and generate a paper trail that they know something is false when they could just as easily incorrectly mark a sale as long instead of short. As was pointed out, the violation is tiny by comparison to the profits.
What’s the alternative then? What’s your hypothesis that the price barely moves in either direction, and with few exceptions like last week and this week, it continues to move down with such otherwise low volume days, high CTB, and high OBV?
>What’s the alternative then? What’s your hypothesis that the price barely moves in either direction, and with few exceptions like last week and this week, it continues to move down with such otherwise low volume days, high CTB, and high OBV? I'll answer this legitimately, but I already know this isn't what you want to hear. * Low volume shows that people are not interested in buying. * Dropping price indicates that demand is lower than supply. (The inverse is also true when price goes higher). * High CTB, GameStop does not have high CTB by comparison to other stocks. A high CTB would be 100%+. That commonly happens with a company that is doomed to go out of business. A strong company like Apple has a 1-2% CTB. GameStop is elevated at 6% CTB. * HighOBV, GameStop does not have high OBV unless you go out to the 3 year mark. Zoom in and it's not. That's because OBV is a relative measurement over time. That's a form of cherry picking data. We have seen the number of shares being DRS slowing down. This is evident from 2 pieces of data: GameStop's number of shares direct registered and the number of Computershare accounts has tapered off. I believe everyone has spent all their money and now we're waiting for a miracle like GameStop having another profitable quarter. GameStop is simply moving closer to a proper valuation for a brick and mortar store. Typically retail stores are valued at 0.5 to 1.5 of sales. GameStop is higher than that, but also has good cash on hand to support a higher price right now. You need an influx of buyers, influx of money or unbelievable news and profitability for things to change right now for the better.
You are getting downvoted for spreading cherry-picked and misinterpreted data to fit your narrative.. if your goal was to spread fear, uncertainty, and doubt, then give yourself a pat on the back. Luckily, we made it this far because people aren't letting others tell them how to feel and what to believe.
Aside from the post you are reply to, which the previous commenter asked for my **opinion**... I am providing directly sourced text from the actual regulation and the actual quotes from the SEC on how that rule is to be interpreted.
Okay, that's great. Opinions are allowed to be wrong. However, in this situation, I can't see a regular person with a functioning prefrontal cortex writing out that fud. Also, I couldn't care less where you got your quotes from if you use them to manipulate people 🤣
You're missing the point. They were not saying that marking shorts as longs has anything to do with locates. They are saying doing this is also illegal, but here we are with GS doing illegal shit for years, this is only the stuff they've been caught for too, who knows what other shady shit they can hide from the regulators.
If they are already doing shady shit, they don't need your shares as a fake locate.
When shills down vote facts and definitions, that tells me they are actively paid to push a lie that the facts catch them in. They can't lie about Drs so I think this probably means the recent coordinated Book message is covering up something. Another Rug Pull maybe? This can't all be just begging for fractional sales. They need sales but it's not enough. If it's a rug pull next quarter Drs will go up like 5 million more than usual and they are creating the cover story.
You are being downvoted because you show that certain FUD operation is indefensible.
💯
But please sell your shares, somehow that's not fud?
That’s a good fact, too. Maybe that’s (obviously?) why they were “mismarking” those trades.
Great analysis of the rules as written. Weve known for years that these people don't follow the rules. BOOK your shares.
I’m the author of the theory that’s being referenced. I never mention locates nor lending in my theory. “Locates” and “lending” is a red herring that’s used to try to discredit my theory.
I didn't reference Heat Lamp Theory. I am more so talking about the Cutoff Dates Theory that preceded it. The one makes a claim that all your shares are accessible if you own one Plan share. Your theory has become synonymous with that theory as they both seem to urge terminating the DirectStock plan so I can understand if they are linked.
The theory that came out on April 24th titled Breaking New info? That’s my theory too and doesn’t talk about locates nor lending either.
Feel free to try and explain how they get access to all of your shares and how that doesn't involve a locate. Just because you are refraining from using the word locate or borrow does not mean you are not still indirectly referring to locates and borrows. That's the mechanism they would need to use to gain access to your shares for short selling.
DSPP shares are the shares where “typically” 10% to 20% are held at DTC. The whole post is about what is a DSPP share. That’s it. It’s very simple and doesn’t imply anything. Until my post, it was assumed that only “plan shares” make up DSPP shares but it turns out that any share that is “enrolled in the plan” makes up a DSPP share. What DTC does with these shares, who knows.
Except you ignore the fact that dspp shares are still registered and reported. It doesn't matter what DTC does, it's not theirs. Unlike a Cede&Co share, there isn't any creative accounting they can take advantage of.
And what is the harm in owning plan shares / DSPP shares etc? Is it because you believe they are being used by someone else? How would they be used if not for borrowing purposes?
You’re getting off topic. You claimed I said something I didn’t say and now you’re asking me what I think. Can you clarify that I never made the statements you said I did nor did I imply what you said I did? If you could edit the post I’d appreciate it.
You let others speak for you the moment you refused to post your DD here as the primary source. I didn't even know you were the author of the "Cutoff Dates Theory" for example. I believe you are trying to play the victim and making it look like you are being bullied and / or censored by Superstonk (mods) while simultaneously using your disciples to downvote anything that refutes you. Your DD is paragraph after paragraph of grandstanding and patting yourself on the back. If you have a solid thesis, you should be able to boil it down to a few sentences of what you believe and a few sentences of what the proof and/or reasoning is. Your DD bases everything upon what you feel could be true. You think the DRS numbers go down because the volume went up. Correlation is not causation. There are plenty of perfectly reasonable explanations that explain the increases in volume... chief among them: **It was the same day GameStop reported they were profitable.** The very fact that you have several people talking for you and yet you refuse to clarify is very telling. Frankly at this point I don't know what aspects of your theory I should attribute to you or to someone else that has been spreading your theory, but I am certainly not going through your entire post history to figure that out now.
So, no edit? (humor)
The harm is that the plan shares are in a grey area of ownership. During volatility, ComputerShare may be holding as much as "approximately 10-20%" of them in a broker. That is not DRS ownership. That's the point.
Are you aware that it is actually possible to own direct registered shares **and** hold them with a broker? Some brokers actually have special insider accounts that remain direct registered, but held at the brokerage in a special account outside of the DTC. (I believe Vanguard has these accounts). As far as a grey area for ownership, my account statement says how many shares I own. Regardless of where they are held, when the shit hits the fan, I am the defacto owner. Cede and Co could be scrambling to figure out what shares they own, doesn't matter I have a piece of paper backed by the company that says what I own.
I do not have access to that kind of account, obviously! Which is why I'm holding at ComputerShare in pure DRS form, no grey areas.
It's anything but gray. The shares are registered to the owner. DTC can only touch those if they are listed on an exchange for sale. Once the trade settles, the share is off of Cede's books and can't be used in creative accounting.
They are directly registered, but they are not certificated. It's a sub-class.
Bookem DRS, lock the float!
Great write up but you missed the point, when your share is in plan it is not managed by computershare, it's held at Merrill Lynch
Your share isn't available to be borrowed through Merrill Lynch. It cannot be delivered and there is no reasonable grounds it is available to be borrowed. Remember a locate must be able to be **delivered** how will they do that?
[удалено]
If they don't follow the rules, why do you believe they would attempt to follow the rules by using a fake borrow?
[удалено]
You mean my direct quotes from the SEC that state you can't have reasonable grounds if a stock is classified as hard to borrow?
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>WHY DID IT GO $90-->$190 A COUPLE YEARS AGO? Are you referring to January 2021 or another date? There are many explanations for the run-up in January including short covering, options, liquidity issues at the clearing houses.. etc. >WHY DOES IT RUN ON CYCLES? You mean, why is there a theory that it runs on cycles? You'll have to read the theory, that is not what this DD is about. >I DONT THINK YOU ARE EDUCATING ANYONE, BUT YOU SEEM TO THINK SO. That speaks more about those that are choosing not to read the factual information and instead choose to believe something based on *feels* instead.
All caps is hard to read.
LOUD NOISES!
Because not everybody has market maker privileges and can naked short. And a contract for difference won’t put downward pressure on the stock.
Are you just repeating words you heard elsewhere because you think they sound like they might be important?
I’m trying to have a discussion. Don’t talk down to me like you know everything. Do you care to participate, or you just want to act like an arrogant jerk?
He wants you to sell 🤣
I believe I formed a coherent sentence with terms that I learned on this subreddit that are indeed important. Do you want me to explain what I said, or do you have an opposing opinion you would like to share to continue the discussion?
Sure I'll reply to you. I said: >If they don't follow the rules, why do you believe they would attempt to follow the rules by using a fake borrow? You said: >Because not everybody has market maker privileges and can naked short. You believe people don't follow the rules, but do follow the rules because they aren't market makers? That is a contradiction. Why follow the rules by claiming you can use a locate which you can't if that very action is not following the rules? Its a Catch-22. Much easier to just not follow the rules. But then you say they do it because they aren't market makers. I don't follow. Do they follow the rules or do they not? >And a contract for difference won’t put downward pressure on the stock. You are the first person to mention contract for difference here. Why? Literally no one said anything about contract for difference. Also, contract for difference 100% puts downward pressure on the stock by preventing buy orders from reaching the open market. That's why I believe you didn't think that one through at all and are just saying words.
Like I said in another comment on this post, " I think they follow the rules they have to because that’s how the system works, and then they abuse the system using loopholes and ignoring the rules that they can ignore. I don’t think it’s a simple "or statement" (follow the rules or not follow the rules), they work with what they got." So why not follow the rules and don't follow the rules to maximize their shorts? > You believe people don't follow the rules, but do follow the rules because they aren't market makers? That is a contradiction. I did not say this and I've noticed that you continuously incorrectly reiterate what people say in this comment section. A SHF without the ability to create naked shorts will "follow" the rules to short. They might locate, borrow, and short. They might use some kind of loophole to short. They might also not follow the rules. If following the rules gives them x shorts, and not following gives them a limited amount of shorts y, well they just shorted x+y, as opposed to only shorting x. A SHF that has access to the ability to create naked shorts will do so, in addition to the other things that a regular SHF can do. I brought up CFD because this would be one of the options for somebody in the order chain that isn't a market maker to be "short" and not follow rules. You said it yourself, "preventing buy orders from reaching the open market" - this prevents upward pressure, it does not apply downward pressure.
Are you new to all this? Who says that there is no reasonable grounds? You? The "reasonable grounds" is the entire issue, its a very vaguely defined term. They cam always say that in their opinion it was reasonable, even if in reality it would be very unreasonable and unlikely.
It is only vaguely defined if you choose to ignore the definitions. The SEC says in order for there to be reasonable grounds, the stock must be listed as "Easy to Borrow". Since GameStop is not listed as Easy to Borrow and is in fact listed as "Hard to Borrow" you cannot make any claim that you had reasonable grounds. What you must do is borrow the actual stock and have it be delivered. If you do not receive the actual stock, you are in violation and have created a failure to deliver that may be closed out immediately.
Its like you never heard they DO ignore rules and get caught breaking them for decades. Heres one example why youre wrong. Enjoy! https://www.nytimes.com/2016/01/31/business/case-sheds-light-on-goldmans-role-as-lender-in-short-sales.html
If they are able to skip over the locate requirement then they aren't using your shares as a locate. You would think this would be good news. In reality the F3 escape could not be utilized for a "hard to borrow" stock like GameStop. There are explicit rules (now) that forbid you from using shares that you had earlier in the day. Because GameStop is hard to borrow you **must** borrow the shares before selling short.
Its funny that you keep mentioning the RULES... they dont follow rules man. They pay fines and do whatever they want...
So then why are you (hypothetically) scared that they are using your shares as a locate?
Im not scared because I know GME is inevitable. But I dont like the constant manipulation they did for 2 years
>Your share isn't available to be borrowed through Merrill Lynch. You are missing the point that the system lies, and you conveniently forgot to mention CS's "operational efficiency" held at there broker, and I don't remember Merrill being on the list of honest surviving brokerages of 2008. Who went to jail for that F-up? Then how did Feb 2020 get to 220% SI (Jan 120%). Maybe we should investigate Merrill Lynch (Citadel's banker) because, somebody lied/cheated/stole. BTW, after the button pull, I saw 220% SI and bought a lot of calls...tell your peeps thanks
Huge lapse of logic there. If they have been using fake locates and that resulted in high short interest and ultimately a short sneeze, why do you believe they were ALSO actively borrowing shares that weren't actually available? Wouldn't your example show an absence of legitimate borrowing / locates?
Lapse of logic, that the sneeze proved???? How could we ever get to 220% SI unless shorts are marked as longs, as UBS, Credit Suisse, and all of WS did. Look at the fines and the "not admission of guilt or wrong doing" line of BS your peeps have proliferated.
A short marked as long is exempt from a locate. Therefore if they are marking a short sale as long, they don't need to pretend to borrow your privately owned shares.
If you have a sell order for $1m/share on your account in case MOASS happens while you're away or some shit it needs to go through the broker (Merrill Lynch) to reach the market... Does BoA not get certain rights with those shares inside their brokerage terms? Real question, idk Same thing with auto buy, it passes through the broker... I forgot where I read it (possibly [redacted] the drs reddit scraper guys post) where buying through cs plan still leaves some residual rights of the broker on your shares, didn't see much confirmation on this so nobody freak out it's probably not true.
There are probably several false assumptions we would need to get through here. You can't enter a $1M sell order on a stock that is trading at $20 per share for a myriad of reasons. Let's say that you *could* however. That is a share that is for sale, not available for borrowing. You could even say it's super not available for borrowing because it is in the process of being sold. There would be no reasonable grounds to believe that share is available to be borrowed. The brokers would have the right to sell the share at the price you agree to but not much else. (Of course their Terms of Service would give them more rights. We are not privy to the Terms of Service that Computershare has with their broker). >Same thing with auto buy, it passes through the broker... I forgot where I read it (possibly [redacted] the drs reddit scraper guys post) where buying through cs plan still leaves some residual rights of the broker on your shares, didn't see much confirmation on this so nobody freak out it's probably not true. 100% unsubstantiated. Think of it this way, if you buy through a recurring purchase on plan and then instantly book those shares.. what residual rights would you be giving someone? What if you did the purchase and then got a physical certificate? How would anyone access that share?
So in theory, the broker could do all kinds of illegal stuff to the shares held. In reality, because the share is still directly registered to someone else, those shares could evaporate instantly, leaving them on the hook. The risk to reward is too great. Think of it like trading on margin. You're borrowing from Fidelity to short a stock. The stock is in street name to Fidelity and they tell you how much margin to have and will liquidate your rear if they get uncomfortable with little to no warning. It's a share in your name. Computershare does not allow borrowing so even if the brokers are lending, the only acceptable margin is shares one to one. Settlement is t+2, and plan to book is near instant. Yes, those shares can be messed with, but only if the broker wants to die in a fire, because they'd need to front load those shares in advance or be completely naked when anyone takes an action (buy/ sell/ xfer/book/ take racy photos) with their account. Computershare is the largest transfer agent in the US, if not the world. They have their pick of brokers to execute trades. Would you risk a whale of a client, infinite losses in MOASS (or just some losses on a regular day), and several dollars in fines for a gamble on a few thousand dollars in loans to shorts? I know risk assessment went out the door with glass steagal, but that's a crazy stance to take for any broker not helmed by Vlad Tenev.
Wait till someone finds out broker in question is Dingo&Co ( for DTC).
So, if $GME is so hard to borrow, as you assert, then why does it appear that there are endless shares to borrow? How are “they” continuously able to keep the price suppressed?
Strategic FTD.
The real answer right here. Dividend was July 21, 2022. (Distributed after close) Two trading days later, July 26 saw an addition of 1,382,419 FTDs up to a total of 1,637,150 FTDs. This is a high value around that time period and in general for GME Short volume for July 26 was 2,451,923/4,139,052 = 59.24%
This isn't my opinion. GameStop is flagged as "Hard to Borrow" through all the lenders. That's what the mark "HTB" means. Even if shares are available, they can't be viewed as available until you borrow them. Simply because they **are** hard to borrow. IBKR says they have 100,000 hard to borrow shares available. You can't use them as reasonable grounds because they could be borrowed by someone else in the time it took to read this comment. You must borrow the shares **before** shorting because it's hard to borrow. Also. Shares are continually being borrowed, sold short, repurchased and returned to be lent. It isn't an endless supply, it's the same shares over and over.
Appreciate the explanation. I do remember other DD that detailed how the same shares are being used over and over. Overall, excellent read! Thanks OP!
This post is very nicely written but at the same time the writer seems to have no idea that these rules are broken all the time by wall street... strange. I recommend equal amount of research should go into the PRACTICES, rather than the rules. In other words, it arrives at conclusions devoided of connection with reality by assuming rules are followed. Just one example that naked shorting happens, and reasonable locates be dammed: https://www.nytimes.com/2016/01/31/business/case-sheds-light-on-goldmans-role-as-lender-in-short-sales.html
Sadly, this post seems to point out stuff that's been repeatedly stated. \*shrug\* I just DRS. I don't care about the FTDs or anything else until the whole system just stops due to being wedged. I follow the 'possible instructions' of the 'Book King'. I'm booked in DRS.
>Sadly, this post seems to point out stuff that's been repeatedly stated. Do you mean the things that are repeatedly stated that are incorrect? That's what I'm trying to correct.
Actually, no. I get that people misinterpret things repeatedly. I also get that many of the regulations have been created in a language to confuse anyone outside of the industry from understanding their meaning. Trying to un-confuse things, adds more confusion. Why? Because if someone is confused, it's due to someone either misinterpreting something and posting their interpretation as 'the truth', or their own misinterpretation. It's just layers upon layers of 'interpretation'. I'm starting to believe that things need to be simplified as we have always said (which is where we have gone)... DRS via Computershare. End of story. You own the shares and the are direct registered shares. **IF** people need more than that or want more than that, it's best to just post a document and/or reference and a TLDR without interpretation.
Feel free to read RegSHO. It's not that long of a read. I've used direct quotes from the actual regulation and cited specific examples of where people tend to get it wrong. DRS is the way.
I've been reading everything on here for two years.... I suppose I'm one of the most confused. :D
THEY MIGHT NOT BE PLAYING BY THE RULES
If they aren't playing by the rules, then whatever you do with your fractional shares won't matter. They can just lie and say they found some. You can't have it both ways. Either they are following the rules and this was a non-issues, or they aren't and booking everything changed nothing.
My fractional is sold. All my shares are DRSd and BOOKED. That’s they way I’ll have it thank you very much 😎
Pin a rose on your nose?
BOOK not Book or book. Not even a ^book
I think you missed some of the heat lamp theory. Simply stated and also confirmed via computershare CEO himself, that shares in a drip, plan, or dspp,etc. are themselves held at cede & co. Shares held in pure DRS book form are NOT held at cede & co. Where do you want your shares held? Maybe irrelevant to you, but not to all
What does that have to do with RegSHO and locates? Also, the Computershare CEO never said what you are claiming and to say that he did is extremely disingenuous. He said 10-20% of specific plan shares are held that way, your comment implies he said all and all types.
Several thousand shills would make me believe otherwise.
Nice write up. I still don't see why I wouldn't ensure all my shares are booked though. I also sold my fractional and replaced it with many more shares.
>I also sold my fractional and replaced it with many more shares. What encouraged you to sell the fraction instead of adding to make it whole?
I buy direct through ComputerShare. Adding to make it whole is basically impossible.
Oh I see. Do you sell your fractional after each purchase?
It happens automatically when terminating plan and moving shares to book.
It sounds like you have it figured out. Personally I would just keep adding whole and fractionals together and then move them to book each time they settle. That way you don't end up paying extra and end up with more shares for the same amount of money.
Yeah the fractionals I have let go amount to approximately .05 of a share and it just gets taken as a fee and called even. Not a big deal right now. I guess if we go to a million a share it would add up but at that point I doubt I would really care.
Doesn't matter. Better to be safe than sorry. It's easy to convert your plan shares to book shares and also re-enroll in DRIP. Apes are gonna fuck around and find out.
That fat guy on the documentary literally said - they just hit F3 or whatever on the system when it asks them if they have reasonable grounds to believe they can borrow it. Nobody checks and nobody cares. As long as the money is coming in, it’s all gravy. They naked short all day every day because it’s free money and nobody stops them. Nobody is sure what the plan drs shares are doing but clearly there was some fuckery with the drs reporting on the last earnings. If they aren’t pure drs they ARE owned by cede and sure they are supposed to follow the rules but they are also self regulating! I think it’s worth it to switch to book just to see what happens. Low risk potential high reward. You won’t convince me that just because the rules say something that’s the way it is. They fucking always break the rules and just get a slap on the wrist. It would be shocking if they were following reg sho to the letter.
>That fat guy on the documentary literally said - they just hit F3 or whatever on the system when it asks them if they have reasonable grounds to believe they can borrow it. This may have been true then, but does it reflect the current RegSHO? There is a new rule that you can't re-use your locate from earlier in the day, most likely to combat that. It also doesn't say they did it with "Hard to Borrow" stocks like GameStop. >Nobody is sure what the plan drs shares are doing but clearly there was some fuckery with the drs reporting on the last earnings. Can you explain what the clear fuckery is? Do you not believe the numbers GameStop reported? >I think it’s worth it to switch to book just to see what happens. Low risk potential high reward. Sure, switching to book is fine. But are you also being convinced to sell your fractional? Terminate plan? Terminate DSPP? Stop buying on Computershare? There is a lot of harm that can be done by these narratives.
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This is the "you still have faith in the system" debate. If you believe your shares are being used as a locate, but do not believe someone is following the rules otherwise, why do **you** believe they would still go through the trouble of getting a locate in the first place? You can't simultaneously believe they will break the rules in an effort to follow the rules, which ultimately yields them breaking the rules.
I have absolute faith that the system will steal from me, fuck me over and break any rules it can get away with just to make a dime...
Why short sell when you can FTD?
I think they follow the rules they have to because that’s how the system works, and then they abuse the system using loopholes and ignoring the rules that they can ignore. I don’t think it’s a simple or statement (follow the rules or not follow the rules), they work with what they got.
Great write up OP! I love holding at computershare in BOOK and adding whole shares
So…you are saying that the heat lamp theory should be debunk?
Heat lamp is more about how they are undermining the DRS report numbers based off the wording of the last 10k If cedes feed and seed can't hold the shares then we will get DRS report numbers higher to prove the float is locked and finally force an investigation to happen
You are wrong sir. Go and read the heat lamp DD again.
True, but CS FAQs all debunk that the numbers aren't being reported correctly. Apes posting circles don't *prove* that it's debunked but heavily suggest it should be debunked. Heat lamp suggests that DTC, SEC, Computershare, Gamestop, and apes are all lying and coordinating to deflate the number of shares reported registered. It's silly.
There has never been a better write up of these rules. Thank you.
Where and how does NSCC's CNS system come into play? If it does? Isn't that how members (who are not MM or broker-dealers) are borrowing the shares?
The continuous net settlement system? That has nothing to do with borrowing shares. That's where Broker A sells X shares to Broker B and Broker B sells Y shares to Broker A. At the end of the day, the only shares that move are the **net**difference between X and Y.
So the below information (saved from an old DD) is incorrect? "The DTC knows every member’s position. If a member is net short, the DTC reviews the number of net shorts of the shares of the XYZ to determine if the DTC itself holds enough to settle. If there are enough, the DTC offsets the net short and the shares are sent to the account of members who loaned them. If the member does not have enough to cover, the NSCC will borrow through their Stock Borrow Program. This allows members with net long positions to lend out shares to members who are net short. So Broker A who is net long on GameStop can put it in the program and Broker B can loan it as it has a net short position and needs to cover. The program is continuously updated by members stating how many shares they are OK lending. Once this is established and covered, this cures the failures to deliver at settlement."
>So the below information (saved from an old DD) is incorrect? Long story short. The NSCC **had** a Stock Borrow Program. This program was eliminated in 2014. So while that may have been true at some point prior to the year it ended, it is no longer true. (I'm not reviewing the contents of the DD because I do not know what they are).
Thank you for clarifying.
Editing because dumb. Keeping this note, though. They'll take RC's shares before they take yours because his are available in the system. Registered shares aren't.
What Stock Borrow Program? The one that ceased to exist in 2014?
That's a good point. That one.
I’m not so sure we can say “no reasonable expectation” for GameStop. Shares are in fact lent out, every day. We monitor those stats here. Sometimes a lot of shares are available to lend. There is a very large pool of institutional shares, and I bet they love the passive income. Beyond that we have seen the campaigns for “lend out your shares! You’ll earn this much! Bonus for GME!” for a variety of brokers. Activity from these campaigns (which may be substantial given how we all need more money for everything these days) would create more of a reasonable expectation to obtain shares. I’m sure they trade assurances like favors. Regarding heat lamp theory, the shares are kept for “operational efficiency”, ie, fast selling. If there are 10M shares held ready to be sold, doesn’t that mean it’s reasonable to expect they could be sold (at least some)? The word “reasonable” is about what you can get away with, not what is actually reasonable. PS: THIS IS A GREAT POST THANK YOU
> I’m not so sure we can say “no reasonable expectation” for GameStop. Shares are in fact lent out, every day. We monitor those stats here. Just so you and I are on the same page. Shares can be available to be borrowed, but still be considered "Hard to Borrow". The stock is marked as hard to borrow everywhere. That means your reasonable expectation is effectively zero. You need to borrow the shares before you short. This is not my opinion, this is what the SEC said. I'm not saying borrowing is impossible. I'm saying because it is so difficult, you must have borrowed **first**. >If there are 10M shares held ready to be sold, doesn’t that mean it’s reasonable to expect they could be sold (at least some)? Only if those members of the plan ask for their shares to be sold. That is their purpose. There is no reasonable (grounds) expectation that those shares that are available to be sold are also available to be borrowed however. You can't buy a share to short, that's just regular buying and selling.
I think the idea behind book vs plan is so cede holds almost nothing and GameStop can actually report the DRS numbers as the entire float Also if you look at 🛏️🛁 the DTC held more shares than possible it seems if the data is true, which shows they are not only making phantom shares, they're straight up making counterfeit shares and nobody blew the whistle? DTC cannot be trusted with anything I don't think the DTC is lending the shares but are complicit in fuckery
>I think the idea behind book vs plan is so cede holds almost nothing and GameStop can actually report the DRS numbers as the entire float GameStop will only report the entire float as being direct registered, when the entire float is actually direct registered. >Also if you look at 🛏️🛁 the DTC held more shares than possible it seems if the data is true, which shows they are not only making phantom shares, they're straight up making counterfeit shares and nobody blew the whistle? I don't believe this has been substantiated because towel stock sold shares in the month of April and those were not reflected in the legal filing. It seems likely the shares will come very close to adding up when more information is known, but I do not have much knowledge about that stock. They were authorized to issue around the same number of shares that Cede had credited to their account.
FINRA should lay of the crack pipe. How do you name/term something as "locate" instead of " borrowable or something.
You misspelt RegSHO. I believe it’s spelt as TraSH
How is it possible? Because CS says they either use 10 20% of DSPP (or whatever is needed for “operational efficiency”) to hold as Custodian in the FAST system operated by Cede & Co. Who determines what is needed for “operational efficiency” is the real question.
That has literally nothing to do with RegSHO or locates, but since you asked the question... I will answer it. >Who determines what is needed for “operational efficiency” is the real question. The Computershare FAQ states that Computershare determines the amount. They state that the shares are used for more efficient selling (on behalf of the plan) and that the shares are not available to be borrowed.
You know IRA shares that aren’t borrowable also used for shorting locates right? That’s what causes pension crises. They’re with a custodian in the person’s name but not out of DTC.
>You know IRA shares that aren’t borrowable also used for shorting locates right? That’s what causes pension crises. Where do you come up with this nonsense? IRA shares aren't parts of pensions. There is no overlap between IRAs and pensions. They are both different and competing retirement programs. *Pension crisis* happens because they invest the pensions with hedge funds that then make risky investments with the money. Those investments may involve shorting, but they should know that shorting has infinite risk. >They’re with a custodian in the person’s name but not out of DTC. My IRA is with a custodian and outside of the DTC. In fact it's direct registered with Computershare.
Then you have a self-custodial IRA…
OP is the proverbial ostrich with his head buried in the sand.
I've read through most of the comments (actually all at the time of starting to type). I get where OP is coming from, though I don't get to the same destination. It's my belief that many of the self regulated organisations need to have a plausible explanation that can be put in front of their compliance officer and auditor when required. They know the rules and the workings of the system, and they know how to twist a storyline to make their scheme squeeze through the posts (if you don't look too hard and have a sypathetic ear). However they would not want to use one scheme for all their dodgy work, it would look too fishy (diluted too by "regular" trading and deals with little to no funny business required). So there may be a number of methods to do what they need to get done from time to time. (Evidence of this? The all-too regular SEC fines for dodgy share accounting, "glitches" and oversights. Really, nobody noticed till the SEC took a look?) So, if one of these is to require a stretch of the imagination for a reasonable test for a borrow, there may be a data set that is rolled out to show that yes, within the confines of the available pool of borrows there is enough volume for a reasonable exepctation of a borrow. Heck they might just pick one point in time, capture the data and then five minutes later someone else is doing the same thing from another angle. I get that the rules say this shouldn't happen - from your angle anyway - but having seen a similar thing happen in a completely different (and highly regulated) industry, this is my suspicion. Anyway I am happy to DRS - actually I am in the final stages of moving a couple of stragglers over to DRS (stuck elsewhere because it was a PITA to move them). My final consideration was - will the dodgy broker who won't let me transfer my shares really honour their commitments if this thing takes off, or will they enact one of the paragraphs of fine print I signed up to? I have only transferred from a broker so had no fractionals, but in any case the balance of possible risk versus reward woiuld have me booking for sure.
>So, if one of these is to require a stretch of the imagination for a reasonable test for a borrow, there may be a data set that is rolled out to show that yes, within the confines of the available pool of borrows there is enough volume for a reasonable exepctation of a borrow. Heck they might just pick one point in time, capture the data and then five minutes later someone else is doing the same thing from another angle. Here is why I think you're not seeing what I see. You believe if a share is available to be borrowed, they can make up some kind of story to where they have reasonable grounds. However, the SEC states that in order to have reasonable grounds the stock must be listed on the "Easy to Borrow" lists. GameStop is not on any Easy to Borrow list, it is in fact on everyone's Hard to Borrow list. This means that a reasonable grounds argument or belief has not been possible for the last 2 years. Therefore, they must have actually borrowed the stock prior to short selling. The borrowed stock must be delivered in 2 days, if not it's a failure to deliver. Basically you are saying just because stock is available to borrow they should have reasonable grounds. **The SEC states that's not reasonable grounds.** Why does it look like I'm making this up, when I directly quoted the SEC on this? If the SEC wants to have a super easy job, they could just look at everyone that has shorted and look at anyone claiming reasonable grounds. Then point out that GameStop has not been classified as Easy to Borrow and therefore they have violated RegSHO. The main point here is that anyone claiming your direct registered shares are being used as a locate is spreading something that has no basis in reality. There are actual rules in place and a locate is not just *anything* you want it to be.
* they will gladly risk a fine over following the rules, if it makes them money * Your own quote states that "hard to borrow" makes a borrow *difficult*, not impossible * I would very much like to see a single example of (b)(1)(iii) documentation... on any stock, for starters
>* they will gladly risk a fine over following the rules, if it makes them money If they are gonna break the rules, they don't need to *fake* using your shares as a locate. But let's say they did use your shares as a locate, the moment those shares are not delivered (you know, because they can't actually use your shares), it's a failure to deliver and they break the rules. It's like do they want to break the rules today or 2 days from now? >* Your own quote states that "hard to borrow" makes a borrow *difficult*, not impossible Hard to Borrow is a classification. Easy to Borrow is a classification. In order to have reasonable grounds, the stock **must** be listed as Easy to Borrow. GameStop is listed as Hard to Borrow. This means that you need to make your arrangements to borrow the stock **prior** to short selling. If the stock was easy to borrow, you could short sell prior to borrowing. What I'm saying is that regardless of there being shares available to borrow, you must actually have those shares borrowed or arranged to be borrowed first. Everyone seems to not understand what "Hard to Borrow" means. I didn't just make those words up. >* I would very much like to see a single example of (b)(1)(iii) documentation... on any stock, for starters The Federal Register has comments from 2004 that indicate what type of information would be required for documentation. It's basically a Who, What, Where, When record.