*Disclaimer: None of the opinions in this post or on this website are financial advice and you should talk to a qualified accountant or wealth manager before making any financial decisions.
I have been doing a lot of digging and as it stands now the SEC has not released the FTD official stats from the last half of February which disappointed me but I digress. Having said that I did come across this little gem.
This Failure to Deliver (FTD) stat line comes straight from the SEC websites data files. It includes the facts that on January 27th they had 27 million FTD shares and then on January 28th 500,000 shares FTD. You can see from the charts that this dump of shares happened before the market opened (gap up) and only increased the volume and attention it recieved throughout the day. This is effectively a gamma squeeze. It is in my opinion that this dump would have been a catalyst for a larger short squeeze had the brokerages not stepped in.
So everyone knows that AMC shot up on the 27th but I feel it is awfully suspicious that a day before brokers announced they will halt the buying of GME and AMC and other stocks, that they dumped 26.5 million FTD shares of AMC. Its almost like they doubled down on the effect that they possibly knew the halt was going to happen the day after. This would not only make them money, because they can short it on the way down(regardless of interest rate), but also not have to sell their original short positions for a loss. The only people who really lost on this investment seems to be the retail traders. Sure they had to pay a premium for shares but to what extent?
I believe if I had access to the FTD shares now it would be overwhelming. The calls that expired in the money on Friday, February 26th, 2021 is when the stock closed above 8.00 at exactly 8.01(my favorite number). This caused a huge amount of shares to expire in the money because of options calls. To be precise 15.4 million shares expired in the money. As it stands there is no way, once again, in my opinion that these shares have been delivered. You would have seen at least half the spike that we seen January 27th. This leads me to my conclusion that they are waiting to deliver these shares at the right moment. Non-conclusively, they have been short laddering the stock price daily and the strategy is to get it low enough to either buy to cover their shorts or to dump the FTD shares as others sell off.
However, there is a lot of pressure building on this situation as the floated shares that are available is decreasing daily which in turn is causing brokers to charge more for shares. So with this we have seen the interest rates to borrow short shares increasing. As of March 7th it stands at 11.6% according to https://iborrowdesk.com/report/AMC. Now there is a talk of AMC counting the shares come March 11th after their quarterly earnings report. If this happens it could also be a catalyst because any naked or illegal short shares would have to be returned before the count or face penalties. Another catalyst seems to be the reverse trend we might see with the passing of the stimulus. That would boost the stock market as a whole, considering 80% of the market trades on algos and those algos trade on upward and downwars spikes in the market as a whole. Whatever the case may be this is going to be something that might cause a major policy change for the SEC and/or the government as they see fit. Only time will tell. Tune in for more info daily if you can afford the time. Apes stay strong and buy more bananas.