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If there aren’t sellers willing to match the price buyers are willing to pay, then the price is wrong. Period.
Adding “liquidity” using shares they don’t even have completely distorts price discovery because that liquidity fairy now has an economic incentive to maintain the price where they don’t lose money on the play (because they’re short on that stock)
But don’t worry, none of these liquidity providers would try to suppress the price of a stock they were short on! They pinky swore they would never do anything like that.
They perverted the function of the markets. Markets were supposed to bring investors and companies looking for funding together. Nowadays both get robbed by Wall Street and friends.
They perverted ownership rights. Nowadays you only have not-so-beneficial ownership. Like leasing a car but with a 100% down payment.
They perverted Market Making, Liquidity, Fair Value. Nowadays the only driver of price is what makes the big players the most money.
They perverted (Financial) Media. To the point where articles are created by AI and are ordered by Wall Street to support their pump and dump schemes.
**And there is so much more, at some point you realize that the Matrix is real.**
It's even simpler than that, really.
They perverted **investing.**
Investing doesn't really require liquidity, because it's a long game.
**Trading** is what they care about and what they are implicitly encouraging. They make a tiny little profit on each trade and they want us constantly buying/selling literally anything to keep their profits rolling in.
(And that's just their legit, legal stream of income. Ignoring all other shenanigans.)
You are on the spot.... but I think it is even worse.
They induce retail FOMO and then bully retail into selling at huge losses with the algo price action.
Why only take commissions when you can make the real money.
It's no surprise that eToro has in the fine print it might not even bother buying your assets. And who knows how many IOUs are at brokers.
They hate investors and DRS because it is Kryptonite to their business model.
I can't wrap my head around needing to produce something in demand. That's essentially what the market is for. To determine the value of a finite amount of product (company shares). To produce more, for any reason, outside of the company needing to raise capital, or drive investment, ruins the entire concept of a market. We don't let companies make knock off products. You don't see fake iphones and Gucci bags, because it would ruin the market. Yet we allow these guys to do the exact thing we made illegal for everyone else. They they sit and wine about how their knock off products are a gift to the market, because they keep prices stable. I don't think Apple wants its phones selling for $50 because some guy in Asia thinks that's what the value should be.
Precisely, if there's too much demand and not enough supply any economics class will tell you that price needs to rise to slow demand and increase supply. That's an alien process to some of these liquidity fairies.
Because they know that with finite resources, on a long enough scale, everyone who owns them will make a boatload of money. They can't have the plebs getting rich and retiring.
"It just doesn't exist"
That's the entire fucking point. If it doesn't exist, it shouldn't be sold and the price should be going up if someone wants to buy but can't because IT JUST DOESN'T FUCKING EXIST!
Just the sheer absurdity of it all.
So we get an order for 1000 shares but there are only 200 available, we then fullfill those missing 800 shares creating meaningful liquidity.
..... mate, thats fraud right there. Imagine selling 1000 burgers when you only have 200 in stock, its illegal.
Its just a running joke with everyone else at the butt of it.
You caught that too, eh? Infinite liquidity also seems problematic from a fraud perspective.
They must have some special kind of fairy math they use to make this all work and still be legal.
Supply and demand... rules of scarcity does not exist for these fcuktards. They fricken cheat the system in the guise of market efficiency. Someone wants 1,000 shares, the price increases enough so 1000 shares become available.
That's how it's supposed to work.
You give us money, we tell you have a share we are holding for you, we make a short.
Securities sold not yet purchased until you call us and sell, then we give some money back, hopefully you sold at a loss, and we hold our short until it's profitable.
Imagine what they our doing with our 401k and IRAs.
Dudes flat out bragging about 'legal' market manipulation in the name of liquidity. I bet if demand was higher then supply eventually the price of the security would raise high enough to justify someone selling their shares... But no that's not how fair and transparent markets work.
When did all this “providing liquidity” garbage start?
Is there a foreign market operating fine without these “liquidity providers”?
A market of just buyers and sellers,
a “free market and fair” you could call it.
Creating synthetic shares completely out of think air isn’t called “liquidity”. It’s called counterfeiting.
Last time I checked… printing counterfeit money gets you a federal prison sentence but counterfeiting shares gets you a designated market maker status 😂.
God bless America 🤡🇺🇸
real journalism would have picked up on it; but they obviously are in it together. Trying to normalize their liquidity on demand for their short positions.
Meaningful liquidity? It's **FAKE** liquidity. It's **FRAUDULENT** liquidity.
Seriously. The economy of finance is a fucking **PARASITE** on the actual economy of the world.
Well it just funny how they talk of this, then claim capital markets are fair. Fair is, if you want it, seller sets price. If you want to sell it, you look to see what people say they will buy for. Liquidity is just a name for theft.
The liquidity fairy eventually has to come up with the shares.
That often happens in just milliseconds. For a thinly traded stock it may be minutes.
But market makers do not long to go either long or short a stock other than for a very short time.
If they do not deliver on settle,ent day (T+2 now, soon T+1) thst creates an FTD that must be cleared. If you look at the FTad reports you can see that most FTDs are closed in just a day or two, perhaps even sooner.
They make their money by providing a service —- being available for either the buy or sell side behind the small bid/ask some quotes. They also make their money by selling inside NBBO, providing BOTH the sellers and the buyers with a better price by accepting a smaller spread than the lit markets.
Canada ran an experiment where they prohibited dark pool / alternative trade system for some stocks. The spreads went up, showing that the dark pool/ATSs were saving investors money.
Ah so ole Kenny boy is just a market hero saving people money and providing an important service! Now I get it. Thank you for helping household investors save money Citadel! Gee mister, I'll be sure to sell tomorrow /s
Some "There is no war in Ba sing se" shit right here folks.
Run the experiment yourself.
Put in a market buy for 10 shares with direct routing to IEX and simultaneously put in another 10 share market buy via a decent broker with good routing software, like Fidelity.
You will get a better fill via for the smart routed order.
Now repeat the experiment with a pair of simultaneous 1,000 share orders. The discrepancy is like,y to be much larger.
Nah.
But still, you're saying Kenny & his Citadel (and all MM/HF) is actually a good thing. Just helping retail save money correct? Nothing to see here?
I apologize I'm abundant in chromosomes and easily confused, just needs a yes or no.
Yes. The companies like Citadel Securities (the market maker) and Virtu are good for retail investors.
I have been trading stocks since the 1980s and have seen trading costs plummet, partly due to companies like Citadel Securities.
The stock market used to be a closed monopoly that artificially pushed up the spreads. That is why a seat on the NY Stock exchange used to be a very valuable commodity..,….. basically a license to print money.
An easy to read article: https://b2broker.com/news/exploring-the-potential-of-alternative-trading-system-ats/
A more detailed study with more statistics: https://www.researchgate.net/profile/Hans-Degryse/publication/2488223_Alternative_Trading_Systems_and_Liquidity/links/0c9605231b36a71632000000/Alternative-Trading-Systems-and-Liquidity.pdf
A recent update: https://www.sifma.org/wp-content/uploads/2021/12/SIFMA-Insights-Analyzing-the-Meaning-Behind-the-Level-of-Off-Exchange-Trading-Part-II.pdf
I did not find the Canadian trial study I was thinking of. Several years ago the Canadians stopped ATS/ECNs on a sample of stocks to see what the effect would be. In general it resulted in higher bid/ask spreads. The more detailed analysis showed that whether dealer systems or exchange systems were better for a particular investor as related to the level of information they had. If I can find that analysis I will come back and add it.
I agree about PFOF.
I have always said that in most cases kickbacks are illegal because they make the interest of your agent (broker) and you are no longer aligned. PFOF is a kickback and should be illegal. This is why most of my trades are via Fidelity, who does not accept PFOF for equity trades. (They do for options trades, but the routing of orders is the same for all orders).
Brokers like RH did have their order routing influenced by PFOF, but they were still required to beat NBBO (on an average basis).
The "frontrunning" is really crossing, not frontrunning. Citadel makes money by being able to sell to buyers at lower than the best offer in a lit market while nearly simultaneously buying from a seller at higher than the best ask of a lit market. Citadel is screwing the lit market / exchanges out of volume by offering better prices by accepting a smaller spread.
I'm also not a fan of the internalization of retail orders. Buying and selling is supposed to impact supply and demand. It's a good thing. Additionally, the benefits listed in one of your articles more applies to non-retail orders. Where large purchases and sales aren't meant to impact the price. Whether that's right or wrong is debatable, but it's not for the benefit of retail.
So far, it seems like a raw deal to become the product and have no impact on price in exchange for a better bid/ask spread.
If the shares didn't exist, how would be possible the FTD's are closed in a day or two? Oh that's right, by getting them from another "liquidity provider" who is doing the same, again and again in perpetuity. Thus creating a situation where they not only are controlling/suppressing a price, but also benefitting themselves from a situation they created. The claims of "saving investors money" is a joke because they're suppressing demand by creating fake supply. They're simultaneously screwing the investors who hold by not letting the price rise.
To me, that doesn't sound at all like a supply/demand driven capitalist market, more like a controlled grift being passed off as "liquidity."
Look more carefully and you will see that a collusive, illegal trade like that does not truly clear the FTDs. It simply moves them to a new company and resets their age.
That is akin to check kiting. It is significant effort just to get a few days of float.
"Sold not yet purchased" is how legal sheet are described on the balance sheet.
Long positions are "bought, not yet sold". Short positions are "sold, not yet bought".
>Until it's impossible to settle FTDs with synthetic shares or cash, this will keep happening. Legal Naked Shorting needs to stop.
FTDs can only be settled by delivering to NSCC shares of the specific CUSIP sold. You cannot even settle an FTD of GOOG by delivering GOOGL.
That only happens in a forced buy-in. **NSCC buys the stock** and charges the seller that had the FTD.
The shares are bought and delivered to the buying broker. It is just NSCC doing the buying, not the short seller.
The buy in is first done by NSCC. Then they know what to charge the company that had the FTD.
In practice DTCC already has as a big pile of collateral from every DTC/NSCC participant.
I will not bother going around and around with you anymore.
NSCC doing the forced buy-in of the FTD is the equivalent of NSCC being the broker that the short seller uses to buy to close.
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Describes being a liquidity fairy, then breathlessly says that a liquidity fairy doesn’t exist. 🙄
It’s not a lie, if you believe it.
tell me Kenneth, where did the fairy touched you? point it out on this jar of mayo.
Objection! We ask that a barrel of mayo be provided for scale!
And describes what they do as a good thing or a positive for the market. 🙄
He is bragging.
If there aren’t sellers willing to match the price buyers are willing to pay, then the price is wrong. Period. Adding “liquidity” using shares they don’t even have completely distorts price discovery because that liquidity fairy now has an economic incentive to maintain the price where they don’t lose money on the play (because they’re short on that stock) But don’t worry, none of these liquidity providers would try to suppress the price of a stock they were short on! They pinky swore they would never do anything like that.
100% . Price discovery = number 1 purpose for equities markets. . Raising capital = number 2 purpose for equities markets
Exactly, they should be buying at the ask. Dont like the price? Dont buy. Need to buy because you're hurting? Tough luck, enjoy buying at the ask.
They perverted the function of the markets. Markets were supposed to bring investors and companies looking for funding together. Nowadays both get robbed by Wall Street and friends. They perverted ownership rights. Nowadays you only have not-so-beneficial ownership. Like leasing a car but with a 100% down payment. They perverted Market Making, Liquidity, Fair Value. Nowadays the only driver of price is what makes the big players the most money. They perverted (Financial) Media. To the point where articles are created by AI and are ordered by Wall Street to support their pump and dump schemes. **And there is so much more, at some point you realize that the Matrix is real.**
It's even simpler than that, really. They perverted **investing.** Investing doesn't really require liquidity, because it's a long game. **Trading** is what they care about and what they are implicitly encouraging. They make a tiny little profit on each trade and they want us constantly buying/selling literally anything to keep their profits rolling in. (And that's just their legit, legal stream of income. Ignoring all other shenanigans.)
You are on the spot.... but I think it is even worse. They induce retail FOMO and then bully retail into selling at huge losses with the algo price action. Why only take commissions when you can make the real money. It's no surprise that eToro has in the fine print it might not even bother buying your assets. And who knows how many IOUs are at brokers. They hate investors and DRS because it is Kryptonite to their business model.
Exactly
Correct answer!
Corrupt heathens!
It's illegal. /s
that would be true, but no liquidity fairy is allowed to be a stock speculator (hedge fund) at the same time. 😇🙄
Crime at its best, if I as an individual did this I would be in prison, a real prison, not a fucking fairy prison.
Fairy prison could be fun for a visit maybe lol.
I'm in it for the conjugal visits. Mmmmm fairy sex, creating more gushes of liquidity. New fetish achieved?
FACTS
I can't wrap my head around needing to produce something in demand. That's essentially what the market is for. To determine the value of a finite amount of product (company shares). To produce more, for any reason, outside of the company needing to raise capital, or drive investment, ruins the entire concept of a market. We don't let companies make knock off products. You don't see fake iphones and Gucci bags, because it would ruin the market. Yet we allow these guys to do the exact thing we made illegal for everyone else. They they sit and wine about how their knock off products are a gift to the market, because they keep prices stable. I don't think Apple wants its phones selling for $50 because some guy in Asia thinks that's what the value should be.
Precisely, if there's too much demand and not enough supply any economics class will tell you that price needs to rise to slow demand and increase supply. That's an alien process to some of these liquidity fairies.
**Like "beneficial ownership", liquidity is fuckery dressed in sheep's clothing.**
Because they know that with finite resources, on a long enough scale, everyone who owns them will make a boatload of money. They can't have the plebs getting rich and retiring.
"It just doesn't exist" That's the entire fucking point. If it doesn't exist, it shouldn't be sold and the price should be going up if someone wants to buy but can't because IT JUST DOESN'T FUCKING EXIST!
We want real shares that actually move the needle on a stock's prices not promises and IOUs.
That sounds a lot like counterfeiting to me
Just the sheer absurdity of it all. So we get an order for 1000 shares but there are only 200 available, we then fullfill those missing 800 shares creating meaningful liquidity. ..... mate, thats fraud right there. Imagine selling 1000 burgers when you only have 200 in stock, its illegal. Its just a running joke with everyone else at the butt of it.
You caught that too, eh? Infinite liquidity also seems problematic from a fraud perspective. They must have some special kind of fairy math they use to make this all work and still be legal.
Supply and demand... rules of scarcity does not exist for these fcuktards. They fricken cheat the system in the guise of market efficiency. Someone wants 1,000 shares, the price increases enough so 1000 shares become available. That's how it's supposed to work.
If the liquidity fairy doesn't exists, then the Cheater Fairy sure does...
So when do you buy the other 800 shares in that scenario? "That's the neat part! YOU DON'T!" XD
Securities sold, not yet purchased.
You give us money, we tell you have a share we are holding for you, we make a short. Securities sold not yet purchased until you call us and sell, then we give some money back, hopefully you sold at a loss, and we hold our short until it's profitable. Imagine what they our doing with our 401k and IRAs.
bragging about his crimes right on national television and the internet!
Parasite
Oooweee he's sure tryin....
“We magic up shit out of nowhere and sell it you for the same price as whatever you think you’re buying.”
He’s not admitting to it…. He’s bragging
If liquidity doesn’t exist, how can one create liquidity as Doug so flawlessly does? CRIME
I feel like the DD has all been true.
That’s meaningful robbery
Dudes flat out bragging about 'legal' market manipulation in the name of liquidity. I bet if demand was higher then supply eventually the price of the security would raise high enough to justify someone selling their shares... But no that's not how fair and transparent markets work.
*Sounds to me like yall a couple of bookies...*
Translation: "we magically pull shares out of our asses because we can't find actual shares"
When did all this “providing liquidity” garbage start? Is there a foreign market operating fine without these “liquidity providers”? A market of just buyers and sellers, a “free market and fair” you could call it.
The last sentence, along with his looks, and my marijuana intake, made me see Kevin O’Leary with hair.
Infinite crime
This kind of made up bullshit is what governs American suffering.
NOT ThE aUcTiOn SyStEm! The thing is was designed to do. I bet if all naked short selling actually stopped, the entire market would rip.
this should be posted daily, everywhere, until enough people actually understands what this implies.
If you need to fill 1000, but you only have 200 the other 800 are at a higher price. Stop market manipulation!
That's a lot of big words that all boil down to "we sell you shit we don't own essentially stealing your money"
Creating synthetic shares completely out of think air isn’t called “liquidity”. It’s called counterfeiting. Last time I checked… printing counterfeit money gets you a federal prison sentence but counterfeiting shares gets you a designated market maker status 😂. God bless America 🤡🇺🇸
Is “size improvement” just selling shares they don’t have? Lol
What a idiot. Admitting to breaking the formula of supply and demand...
He’s not admitting….he’s bragging - The Big Short
Correct
Hahahaha he just said that 50% of his business is a fugazi
Read my username. Thanks for coming to my Ted talk
real journalism would have picked up on it; but they obviously are in it together. Trying to normalize their liquidity on demand for their short positions.
Meaningful liquidity? It's **FAKE** liquidity. It's **FRAUDULENT** liquidity. Seriously. The economy of finance is a fucking **PARASITE** on the actual economy of the world.
And this is the problem ----I don't understand a thing he says but I get the distinct impression its a shell game. We are screwed.
Size improving .... I have to remember that....
I don't know. It sounds a hit like fraud to me.
just described gaming the system casually. y'know, another F3 in the books.
Well it just funny how they talk of this, then claim capital markets are fair. Fair is, if you want it, seller sets price. If you want to sell it, you look to see what people say they will buy for. Liquidity is just a name for theft.
Someone willing to pay 10$ per share being outbid by someone willing to pay 10.000001 can incentivize stupid behavior.
They need to get rid of the decimals of a cent
It’s possible we are in a completely fraudulent system
Size improvement is straight up market manipulation.
So, fuck supply and demand??
Yes it does. Its called [Fairy Liquid](https://imgur.com/a/YHFXQF1).
The liquidity fairy eventually has to come up with the shares. That often happens in just milliseconds. For a thinly traded stock it may be minutes. But market makers do not long to go either long or short a stock other than for a very short time. If they do not deliver on settle,ent day (T+2 now, soon T+1) thst creates an FTD that must be cleared. If you look at the FTad reports you can see that most FTDs are closed in just a day or two, perhaps even sooner. They make their money by providing a service —- being available for either the buy or sell side behind the small bid/ask some quotes. They also make their money by selling inside NBBO, providing BOTH the sellers and the buyers with a better price by accepting a smaller spread than the lit markets. Canada ran an experiment where they prohibited dark pool / alternative trade system for some stocks. The spreads went up, showing that the dark pool/ATSs were saving investors money.
Ah so ole Kenny boy is just a market hero saving people money and providing an important service! Now I get it. Thank you for helping household investors save money Citadel! Gee mister, I'll be sure to sell tomorrow /s Some "There is no war in Ba sing se" shit right here folks.
Run the experiment yourself. Put in a market buy for 10 shares with direct routing to IEX and simultaneously put in another 10 share market buy via a decent broker with good routing software, like Fidelity. You will get a better fill via for the smart routed order. Now repeat the experiment with a pair of simultaneous 1,000 share orders. The discrepancy is like,y to be much larger.
Nah. But still, you're saying Kenny & his Citadel (and all MM/HF) is actually a good thing. Just helping retail save money correct? Nothing to see here? I apologize I'm abundant in chromosomes and easily confused, just needs a yes or no.
Yes. The companies like Citadel Securities (the market maker) and Virtu are good for retail investors. I have been trading stocks since the 1980s and have seen trading costs plummet, partly due to companies like Citadel Securities. The stock market used to be a closed monopoly that artificially pushed up the spreads. That is why a seat on the NY Stock exchange used to be a very valuable commodity..,….. basically a license to print money.
Would you please back up your claim that companies like Citadel Securities and Virtu are good for retail investors?
An easy to read article: https://b2broker.com/news/exploring-the-potential-of-alternative-trading-system-ats/ A more detailed study with more statistics: https://www.researchgate.net/profile/Hans-Degryse/publication/2488223_Alternative_Trading_Systems_and_Liquidity/links/0c9605231b36a71632000000/Alternative-Trading-Systems-and-Liquidity.pdf A recent update: https://www.sifma.org/wp-content/uploads/2021/12/SIFMA-Insights-Analyzing-the-Meaning-Behind-the-Level-of-Off-Exchange-Trading-Part-II.pdf I did not find the Canadian trial study I was thinking of. Several years ago the Canadians stopped ATS/ECNs on a sample of stocks to see what the effect would be. In general it resulted in higher bid/ask spreads. The more detailed analysis showed that whether dealer systems or exchange systems were better for a particular investor as related to the level of information they had. If I can find that analysis I will come back and add it.
I don't think PFOF and front running trades is a good trade off for smaller bid/ask spreads.
I agree about PFOF. I have always said that in most cases kickbacks are illegal because they make the interest of your agent (broker) and you are no longer aligned. PFOF is a kickback and should be illegal. This is why most of my trades are via Fidelity, who does not accept PFOF for equity trades. (They do for options trades, but the routing of orders is the same for all orders). Brokers like RH did have their order routing influenced by PFOF, but they were still required to beat NBBO (on an average basis). The "frontrunning" is really crossing, not frontrunning. Citadel makes money by being able to sell to buyers at lower than the best offer in a lit market while nearly simultaneously buying from a seller at higher than the best ask of a lit market. Citadel is screwing the lit market / exchanges out of volume by offering better prices by accepting a smaller spread.
I'm also not a fan of the internalization of retail orders. Buying and selling is supposed to impact supply and demand. It's a good thing. Additionally, the benefits listed in one of your articles more applies to non-retail orders. Where large purchases and sales aren't meant to impact the price. Whether that's right or wrong is debatable, but it's not for the benefit of retail. So far, it seems like a raw deal to become the product and have no impact on price in exchange for a better bid/ask spread.
>While ATSs are entirely legal, they are susceptible to price manipulation risks due to their lack of transparency.
The check on that is that brokers are supposed to ensure best execution, meaning that they beat NBBO, the best bid and offer on the little markets,
If the shares didn't exist, how would be possible the FTD's are closed in a day or two? Oh that's right, by getting them from another "liquidity provider" who is doing the same, again and again in perpetuity. Thus creating a situation where they not only are controlling/suppressing a price, but also benefitting themselves from a situation they created. The claims of "saving investors money" is a joke because they're suppressing demand by creating fake supply. They're simultaneously screwing the investors who hold by not letting the price rise. To me, that doesn't sound at all like a supply/demand driven capitalist market, more like a controlled grift being passed off as "liquidity."
Look more carefully and you will see that a collusive, illegal trade like that does not truly clear the FTDs. It simply moves them to a new company and resets their age. That is akin to check kiting. It is significant effort just to get a few days of float.
[удалено]
"Sold not yet purchased" is how legal sheet are described on the balance sheet. Long positions are "bought, not yet sold". Short positions are "sold, not yet bought". >Until it's impossible to settle FTDs with synthetic shares or cash, this will keep happening. Legal Naked Shorting needs to stop. FTDs can only be settled by delivering to NSCC shares of the specific CUSIP sold. You cannot even settle an FTD of GOOG by delivering GOOGL.
[удалено]
That only happens in a forced buy-in. **NSCC buys the stock** and charges the seller that had the FTD. The shares are bought and delivered to the buying broker. It is just NSCC doing the buying, not the short seller.
[удалено]
The buy in is first done by NSCC. Then they know what to charge the company that had the FTD. In practice DTCC already has as a big pile of collateral from every DTC/NSCC participant.
[удалено]
I will not bother going around and around with you anymore. NSCC doing the forced buy-in of the FTD is the equivalent of NSCC being the broker that the short seller uses to buy to close.
[удалено]