Welcome back to the channel everyone today i want to talk about the off book or off exchange. Shorting, that's just been revealed. I want to talk about what this actually means for amc and also what off book shorting actually is and how it differs. The shorting through the dark, pools so stay tuned and let's make some money - and i want to dive straight in with the key information.

So this data comes directly from a website called quiviquan or cuevaquan.com. It's obviously showing the history for amc and it's showing the net short volume of exchange or off book. Now you've got many different kinds of trading or many different kinds of shorting. You've got shorting or trading on the lit exchanges, where, obviously the price is impacted.

As soon as the trade is processed, hedge funds can also trade and shore through the dark pools, which means trading away from the exchange on the new york stock exchange and processing it through a separate market makers trading facility ak citadel dark pools. Now these transactions do still impact the stock exchange and they do still impact the lit price. These transactions are just performed away from the lit exchange to obviously protect these hedge funds, placing larger trades. It's also speculated that these trades can be massively delayed and impact on the lit price or the stock exchange price at a later date, and therefore it makes sense for these hedge funds to try and buy shares in the dark pool and sell them through lit exchanges And therefore, it makes sense for the hedge fund to try and buy in the dark, pools and delay that price impact, but sell immediately on a lit exchange to have an immediate price impact.

And that way they can plan and coordinate the release of the darkpool transactions into the lit exchanges impacting amc in aftermarket hours or when there's lots and lots of trades going on like right at the market open, but trading or shorting off exchange is something completely different. These transactions never impact the lit price, because it's simply an exchange between two separate parties. These two parties are known to each other and transact directly with each other, instead of being unknown and transacting through a stock exchange. Now what you can see here is the net number of shares, purchased and shorted off exchange over the last few years, dating all the way back to 2016..

Now. The first question you may have is tom: if these transactions don't impact the exchange and they don't go through the stock exchange, how is this data collected and how can we be certain that it's accurate, even though these transactions don't actually impact the stock exchange? They still have to be reported to those regulatory agencies. However, of course like everything, these transactions are self-reported and therefore you can never really be a hundred percent sure of its true accuracy. So i wanted to first show you the off exchange short volume for apple to make sure we have this the right way around.

For example, if the net short volume goes negative, does that mean they're shorting more or does that mean they're buying more shares, meaning the short volume is negative, so looking at apple, we can see the net short volume has been getting progressively more and more negative. Since 2016, all the way through 2021 and 2022, i think what this shows to me is that, obviously, these hedge funds are accumulating more and more apple shares off exchange, they've, obviously been buying apple shares since 2016, because shorting apple since 2016 just wouldn't make sense. Shorting. Nearly 16 billion shares of apple off exchange wouldn't make sense whatsoever.

Therefore, it's likely that actually, 16 billion shares of apple have been bought off exchange instead of shorted off exchange. Now, obviously, that 16 billion shares is more than the float for apple, because it's likely that many of these shares have then been sold on the lit exchange in return. So all the net shares purchased off exchanges, 16 billion shares. Obviously many of these shares have now been sold through the late exchange.

Now, if you go back to amc, it looks like through 2020. Many of these hedge funds were actually increasing their net short volume. Okay, shorting amc shares off exchange. That makes sense, because many hedge funds were just trying to accumulate a short position during 2020, obviously as a result of the pandemic, but as a result of the january 2021 run up, many of these hedge funds have been trying to buy tons and tons of shares Off exchange to then obviously sell them back through the lit market.

It looks like these. Hedge funds tried to buy almost 500 million. Shares of amc off exchange during the january 2021 run up not impacting the lit price and then obviously sold all of those shares through the lit exchange impacting the price again through the june run-up. These hedge funds brought hundreds of millions of shares of exchange and then sold them through the lit market again impacting the price.

At one point, these hedge funds have bought a total of 1.76 billion shares of amc of exchange and then stuffed them through the exchange. Obviously, impacting the price, and also guys, if you haven't already be sure, to sign up to mumu, using the link in the description below to get those five free shares worth up to twelve thousand five hundred dollars in total. Moomoo is brilliant for buying shares of amc because they don't accept payment for order flow. Mumu, don't use clearing houses like apex brokers, which are effectively affiliated with citadel.

They use their own clearing house food to incorporate it, which doesn't accept payment for order flow. Moma is also a brilliant trading platform, it's very easy to use and it's entirely commission free for both u.s residents and also australian residents. But through 2022 it looks like these. Hedge funds have been selling shares off exchange because the net short volume is reducing out of its negative position.

Now again, i think that makes sense, because some of these hedge funds are obviously selling their shares of amc to other hedge funds that are currently short to allow them to cover their short position and escape without going bankrupt. We know that some institutions, like blackrock and vanguard, are probably selling these shares off exchange to other hedge funds that have been illegally shorting amc to allow them to cover their short position and escape now. I think this is a good thing, because the seller share off exchange to sell from one hedge fund to another hedge fund, that first hedge fund still has to buy the share in the lit market. So that means there's still around 1.4 billion shares of amc.

That still have to be purchased in the lit markets to be able to be sold off exchange by those legit hedge funds to those illegally operating hedge funds, and i am obviously perfectly happy with these hedge funds purchasing 1.4 billion shares of amc on exchange. Now i also wanted to talk about the dark pools that we can see from stockgrid.io, and a very similar story seems to be happening from around the 1st december. All the way up to the 9th of may, the short volume in the dark pools has been net positive. What that means is, through december all the way until may, hedge funds have been shorting more shares in the dark pools, but since that early may period it seems the hedge funds are now starting to buy shares in the dark pools, because obviously they've run out of Shares to show this comes at a time when the cost to borrow for amc is going absolutely crazy, not only a few hours ago, but i touched on the cost to borrow in my earlier video today.

But since then, the cost of borrowing average has already increased up to 31.5 percent. A cost to borrow maximum is over 48, and the cost to borrow minimum has also increased up to 11.6 percent and again, the reverse. Repos have now updated and a new all-time high has been set over 2.1 trillion, nearly halfway to 2.2 trillion already. It was only a few hours ago in my first video today when we hadn't even broken this 2.1 trillion mark.

This just shows these hedge funds are getting more and more and more desperate, they've, obviously completed all of their shorting off exchange and all of their shorting in the dark pools, and their only possible play now is to buy shares in the lit exchange. As unusual ape tweeted, he said imagine when 200 to 500 million volume days like last year, start to kick in. Obviously, over the last few months, our volume on a daily basis has been only ranging from 20 to 100 million shares. But imagine when 200 to 500 million shares or potentially even a billion shares are traded on a daily basis.

Just like we saw back in june of 2021., he said amc can move up with only 30 million shares traded by between seven and ten percent. Just like we've seen over the last two days, this clearly shows they are still trying to suppress amc as much as they possibly can, but amc is becoming more and more volatile. Last year we only saw a 7 to 10 move with 200 plus million shares traded. Now we see that same move with only 30 million traded and on days where we have seen a hundred million shares, traded or above we've seen amc move by 30, 40 percent or even higher, and this also comes at a time when credit suisse is warning that Its capital position is eroding and that it expects another quarterly loss.

Credit suite is having continual outflows over the last few months as a result of the market crashing, even though the market has recovered over the last few weeks, credit suite is still seeing its capital eroding and again as unusual wells tweeted. This also comes at a time when mortgage demand has fallen to its lowest level in 22 years, we're no longer at a 10-year low, we're now at a 22-year low. That means mortgage demand is currently lower than it was during 2008 and 2009 during the recession and during the housing bubble implosion. Finally, i also wanted to very quickly touch on gary gensler's speech and, what's likely to happen to payment for order flow in the future.

Obviously, gary gensler spoke today about payment fraud of flow and his plans to change the payment for order flow system into some kind of auction system. Now i think at the moment, it's too early to say exactly what's going to happen to this auction system, but i personally don't know if it's any real improvement over the payment for order flow system. Obviously, under the payment for order flow system, these trading platforms can sell their data or they can sell their trades directly to market makers and effectively sell to the highest paying customer. If it's an auction system, these trading platforms can still sell their order flow.

Just this time it goes to the highest bidder, not the highest, paying customer, but is there really a difference? Those corrupt market makers like citadel, are just going to outbid other market makers and they're still going to get the same order flow from these same trading platforms and, as tony dinario said, breaking news. Gary gensler at the piper sandler conference does not address the prohibition of payment fraud of flow and avoids directly answering questions about prohibiting it. Therefore, it seems gary gensler clearly has no intention about prohibiting payment, fraud or flow and instead is just gon na somewhat change. The rule book, however, i do think so far it's too early to talk about, but the fact that payment for order flow is on the table and a potential ban or reconstruction of payment for order flow being on the table is a good sign, as it does Show that retail is making the right headway.

However, it wouldn't surprise me if gary gensler and the sec effectively put a fast one on us. They say they cancel payment for order flow and prohibit it create something entirely new. There is just payment for order flow. Just with a different name, similar to how in 2008 ceos were indeed outlawed, but something exactly the same as cdos have been created and just named a bespoke tranche opportunity, but obviously it's completely different.

It just has a different name, but guys be sure to. Let me know what you think down in the comments below also be sure to ding that notification bell, because that way, you'll be alerted. When i upload a new video cheers.