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u/Tank_610 23d ago
They should’ve increased it to $1 million instead of $250,000.
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u/VonGeisler 13.01 23d ago
Agreed, or have a variable scale depending on the size of the hedge fund.
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u/CarryPennies 23d ago
Isn't even that a drop in the bucket for these guys? What's the big deal?
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u/VonGeisler 13.01 23d ago
It specifically mentions the smaller cap hedge funds. It seems like they are blaming the little guys. But they can’t raise it too much higher otherwise smaller hedge funds would be priced out. Now a variable rate depending on the size of invested capital would be better.
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u/-Shotgun777 23d ago
Hedge funds including shitidel been fighting this since April, 88% don't have 250k and these rules are for intraday! No more 30 day bullshit 🤪
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u/alison_bee Diamond Hands 23d ago
every time I think about how they could have covered already, I die laughing. thanks for the laughs, hedgies. and THANKS FOR THE TENDIESSSS!
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u/Cobrakai52 13.01 23d ago
88%. Is this a trust me bro?
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u/-Shotgun777 23d ago
No posted on site, CHARLIE VIDS on YouTube has all the filings links and proof
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u/[deleted] 23d ago
88% don’t have 250k? How do you mean? Need a wrinkle in the brain box here 🧐
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u/ThirdIRoa 13.01 23d ago
He's just spitting shit out bc he's excited. I wouldn't pay it too much attention.
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u/gimmethegold1 23d ago
Wat? 250K is a drop in the ocean. 88% sure this one isn't going to do a thing y'all
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u/VonGeisler 13.01 23d ago
A lot of them are fully leveraged, so they don’t have cash on hand without selling securities, and if most of their securities are shorted then they can’t really sell. Shitadell just released their security holding and their expenses due to shorted stocks was higher than their held securities.
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u/-Shotgun777 23d ago
Yeah that's why hedge funds been fighting this so hard lol it matters cuz they are over leveraged in short positions
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u/DaDumbBaby Diamond Hands 23d ago
Wat means
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u/AroundMyCity 23d ago
Means the Twitter campaigns that started months ago are creating some movement today. Better policy being written.
Not at the finish line but 10 steps closer than we were last month.
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u/DreamimgBig Crayon Enthusiast 🖍️ 23d ago
Means nothing. $250K is chump change.
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u/PM-ME-PMS-OF-THE-PM Diamond Hands 23d ago
It's chump change for some of the big fish but it's not chump change for the little fish.
100 little fish that each have 10,000 shorts being margin called has the same effect on price as one big fish having 1,000,000 shorts being margin called.
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u/dandyj87 Diamond Hands 23d ago
Good point. It's easy to forget that there are smaller operations doing the same sort of predatory naked shorting which are riding the coattails of Shitadel.
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u/SpoonerSleutherton 23d ago
Yes and in the proposal for the rule it states that part of the reason the SEC is recommending this rule, is that a large number of the institutions that had the amount in that account go below 10,000 (and were then able to meet the amount again) were institutions that would not have been able to keep up with the 250,000 minimum that is being recommended. They go onto say that if 250,000 was implemented earlier then these memebers would have already been eliminated helping make markets naturally more efficient
So this rule is specifically being made to cull the herd
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u/Noakespg2 8.01 23d ago
Agreed. They deal with billions, I think this is a token change.
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u/bicflair 23d ago
yea, the shitadels maybe. there are more small SHFs than large ones & the majority does not deal w billions.
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u/-Shotgun777 23d ago
NSCC 2021-010 goes into effect August 24th NSCC 2021-005 goes into effect September 11th, CHARLIE VIDS on YouTube has all the filings and links!
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u/DavidHume69 Diamond Hands 23d ago
I’ve always thought the canary in the coal mine would be the smaller “family fund” hedgies closing their positions due to increased collateral requirements. Which would then start the cascade of covering and eventually the MOASS. I wonder if this liquidity requirement will cause some of those smaller HFs to reconsider their risk profiles and bail.
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u/Exciting_Advance8793 SilverBACK 23d ago
Can anyone explain the rule? Never understood the 10K to 250k collateral etc. Need smooth brain language pls
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u/singh853 Crayon Enthusiast 🖍️ 23d ago
Think of collateral as an insurance policy for the brokers (the ones who lend out the shares in the first place). It’s basically how much a fund (or even an individual) needs to have in their account as cash or assets in order to keep shorting stocks. If they don’t have this amount available, they can be threatened with margin calls.
This filing makes a significant jump in those requirements. I’m sure funds like Shitadel do have $250K lying around, but I’m willing to bet not every fund does. Those groups would be smart to jump ship before this goes into effect, or else risk margin calls.
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u/Exciting_Advance8793 SilverBACK 23d ago
So for the whole of Shitadel needs only 250K? Cause that's what I wanted to know. If that's the case, yall are hyping shit up for nothing. WTF is 250K for a company that manages 200billion+. I don't get it
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u/singh853 Crayon Enthusiast 🖍️ 23d ago
I believe so, I’m admittedly not an expert on the market or stock market rules. Most of my knowledge comes from reading about it on Reddit.
But to your second point, I’ll say what I’ve been saying for at least a month now: Shitadel are the final boss. They’re not even my concern right now. What’s more important is to get the smaller hedge funds/individual investors margin called first. It’s all about the domino effect, increasing the price of AMC to where Shitadel feel threatened.
We saw with GME in January, some notable hedge funds really did get screwed. So we just gotta work our way up, and I at least believe this filing is another tool to help us in the long run.
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u/VonGeisler 13.01 23d ago
Be cause they are over leveraged and likely would have to sell some securities to reclaim that cash on hand. Don’t forget, money sitting around is not making money, their systems transfer funds from one thing to another without letting it flow through a cash account. But this is directed currently more at small cap funds that will have to close positions as they won’t have $250k on hand in a cash account and could start a trickle up affect.
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u/Nightshdr 23d ago
Doesn't this have to be calculated PER short? So 10.000 shorts requires two billion five hundred million dollars at least?
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u/singh853 Crayon Enthusiast 🖍️ 23d ago
That’s where my lack of knowledge shows. What you’re saying makes more sense (because having a static value across all investors seems overly simplistic), but I just don’t know myself. There are definitely people around here who know this stuff inside and out.
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u/hoster7177 23d ago
I am with you...I initially thought "per $10,000 bought / shorted" to 250k but the wording is "the FIXED amount," and I assume this is a fixed, one time payment. If so, this is a joke as even a junior trader would have 250K in their bank account and then some. Well, better than nothing.
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u/carrot_cockalorum 23d ago
This is why it matters. Per /u/singh853 up above: Shitadel are the final boss. They’re not even my concern right now. What’s more important is to get the smaller hedge funds/individual investors margin called first. It’s all about the domino effect, increasing the price of AMC to where Shitadel feel threatened.
We saw with GME in January, some notable hedge funds really did get screwed. So we just gotta work our way up, and I at least believe this filing is another tool to help us in the long run.
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u/GreyWind999 APE 23d ago
Bunch of hedgefunds are pissed about apparently. So this is very good I assume
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u/truckrav 23d ago
Iv’e been here from start rule by rule etc month in month out, nothing have really changed. Dont get to hyped by another rule stay the course. Not financial advice. 🤝
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u/GoatimusMaximonuss 23d ago
I feel like we’ll be here in October getting excited for yet another rule implementation. We’ve been here several times thinking yes this is the one and yet here we are. Manage your expectations and as always stay the course, buy and hodl. Not financial advice
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u/felonioustaint 23d ago
This is actually HUGH!! The 250k is not a one time charge to HF's they must pay 250k per account! Many larger HF's have up to 30 accounts a day. I can't take credit for this. Big thanks to Crinklekitten on twitter for his DD.
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u/johnyComelately18 23d ago
looks like the intention for this is to prevent fomo from retail traders joining in and to margin call those on leverage whose pockets aren't deep when it moves violently.
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u/TheHedonyeast 23d ago
NSCC-2021-010 is the smoking gun. nothing happens until that one is in force. the rest dont matter so much.
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u/kolob-brighamYoung 23d ago
250k doesn’t seem like a lot
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u/Deom23 23d ago
Imagine you have 100 shell corporations
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u/kolob-brighamYoung 23d ago
Doesn’t Citadel manage like 70 billion tho?
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u/bicflair 23d ago
they arent the only hedge fund short AMC either, nor are the funds they manage the norm for smaller hedge funds. shitadel needs to manage price, smaller hedgefunds gettin called makes that hard to do and then they too will follow suit.
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u/Angel5862 8.01 23d ago
Good comment! What I get out of your comment is buy, hold, watch the HF dominoes fall, and then rocket ship takes off. 🚀
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u/Truckermark10-4 23d ago
Just a couple of dominos need to fall regardless of size and the whole shit show will crumble! Bullish!
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u/Theoretical_Action 23d ago
Can someone ELI5 why $250,000 is going to hurt any hedge fund? They pay more in SEC fines on a yearly basis
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u/No_Zucchini2982 23d ago
MOASSSSSSS They freaking know its coming guys keep that buying pressure up !! If we get that volume over 100 million few days in a row it's over for them
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u/Ok_Somewhere3828 23d ago
Can anyone explain how this works in practice? 250k doesn’t seem like much?
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u/Koalitycooking 23d ago
Is it $250k per share, or per block, or for all shares shorted? Sorry, I’m truly retarded
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u/Ok_Stranger8740 APE 23d ago
Per account, big hedge funds have multiple accounts... 10-30...multiply by 250k! 🔥
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u/jeswanders 23d ago
so at most, just a few million a day? don't these HFs manage billions though?
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u/MesaBit 8.01 23d ago
Yes. What it does is takes a little more of their power away from them. If they have 10 accounts. The old $10,000 means they only need 100k in their account and they can trade with the rest of their funds. Now they have to have 2.5m in their accounts that they can’t trade with.
Remember- this is death by 1000 cuts. This is just one of those tiny cuts
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u/BrotherMouzone3 23d ago
Big hedge funds....it's chump change but small hedge funds can't afford to spend $250k per account.
This will cause the small ones to get margin called.
That will increase the share price since shares will need to be bought back. Shitadel needs to keep the price down because they STILL have to eventually buy shares back.
Shitadel now has to spend even more money holding the price down. It puts pressure on them indirectly. There are A LOT more little hedgies than big hedgies.
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u/jeswanders 23d ago
where can i find the list of institutions shorting AMC right now? curious to see how many there are as well as how many of those are 'small'.
if enough of these small hedge funds can margin called, it'll add a bunch of buying pressure i presume?
I'm sure this has been asked but I can't find an answer as of yet...what's the practical impact of this increase in collateral? Does it scale with volume?1
u/Purple-Television522 23d ago
If you please could.. would you explain this? 250k per share? trade? FTD? I'm sure a one time occurrence of 250k is nothing to them.
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u/theapeway 23d ago
250k ain’t shit to these people. I need a wrinkly brained ape to explain to me how this really helps us. I’m all about leveling the playing field but this just seems like you’re throwing a dandelion at a charging rhino hoping that’ll stop it.
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u/Successful-Berry-618 23d ago
Oh yeah? Another win. Enough AMC for today. Now go back to work and keep holding. You’ll know it when you land on the moon.
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u/SomethingAweful308 23d ago
TLDR'; This is the Bill Hwang rule. 250k is piss in the wind for real hedge funds. They don't want another BH with duplicate positions at 4 banks, while pledging the same cash as collateral to all 4.
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u/OneLifeCycle 23d ago
I didn't see anything in there about suspending the dark pools...
Am I missing something?
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u/Ok_Stranger8740 APE 23d ago
Once it gets approved on the federal register, which is the last hurdle for any filings, then it will be implemented no later than 20 days. However, the fact it was an accelerated approval, it means they are trying to get this passed quickly before the…..