Welcome back to the channel everyone today, gary gensler and the sec just confirmed that brokerages, like robin hood, never actually bought shares in gamestop and amc, so stay tuned and let's make some money, and i want to dive straight in with the key information. So i'm going to start by playing you this video that gary gensler posted today and then i'm going to break it down and explain how these brokers never actually purchased our shares that we paid for on our trading platforms. Everybody should have access to our capital markets. We're taking a close look at the events of earlier this year, where we find that there was wrongdoing anywhere in our markets, we'll pursue it.

One thing we do know that drove part of this, though, was the plumbing: no, not that kind of plumbing market plumbing. Behind our retail trades is something called a clearing house. They exist to reduce the risk of our capital markets by stepping between buyers and sellers to help ensure that they get their securities on one side and cash on the other. They also add some time between when you execute a buy order, for example, and when you actually get the stock.

If you enter into a trade on a monday, say the cash and securities don't finish changing hands until wednesday. That's called two-day settlement, but what? If the price goes way up and the seller no longer wants to hand over securities or what, if the broker goes out of business before that two days were up so clearing houses need to have rules standing in the middle to reduce those risks. And importantly, the parties to the trade need to post some money called collateral or technically margin to cover any of those potential losses. So, back to january the significant volatility - the trading volume in these meme stocks, like gamestop, prompted larger than usual cause for money, marching costs on these brokerage applications.

A number of brokers then stepped in and restricted investors ability to purchase certain stocks. These decisions raise a number of questions about the rules and procedures for brokers separately. They also prompted questions about whether we could lower the risk by addressing the plumbing the longer it takes for trade to settle the slower, the plumbing, the more risk our markets assume. The more risk, fundamentally that we all assume the good news, though, is we now have the technology to shorten that plumbing to one day or even perhaps the same day you buy a stock on monday, you get it on tuesday or maybe even monday evening.

I've asked the staff for the securities and exchange commission to put together a draft proposal for the commission's review on this topic. In the meantime, i encourage you to read more about the meme stock events in the sec staff's recently published gamestop report check it out on our website sec.gov. So basically, what's going on here is because of the t plus two settlement. There's a lot of brokerages like robin hood, for example that never actually purchased shares in amc and gamestop because, as gary gensler said, the price went up massively.

So if you'd purchased gamestop at fifty dollars a share, robin hood would have had to go into the market and buy it for potentially five hundred dollars. A share before giving it to you and therefore losing out massively on their purchases and also, as gary gensler said, because of this risk. That's why the dtcc issued robin hood. A three billion dollar margin, call they'd done the calculations and said robin hood.

We think you've got these orders at fifty dollars and you've got to buy them at five hundred dollars and therefore you're going to lose about three billion dollars in the process and therefore that's how much collateral we need from you. The dtcc obviously take this collateral. Just in case, robin hood does go bankrupt and therefore the dtcc then have the cash to actually go out and buy the shares without suffering any financial loss themselves. But we also know that robin hood turned around and said.

Actually, we don't have three billion dollars and we also can't raise three billion dollars. It's well documented that vlad basically said that he couldn't raise that amount of cash and there was no way he was meeting a three billion dollar margin call and as discussed between vlad and elon musk on the spaces call actually robin hood only stumped up 700 million Dollars because they'd basically managed to come to some kind of arrangement or agreement with the dtcc and therefore that's why robin hood actually never bought around 2.3 billion dollars worth of amc and gamestop stock, but believe it or not. It wasn't just robin hood that had this problem there's a poster on reddit that says add another name to the soon to be dead brokers list. I also wanted to quickly.

Let you all know that moomoo are now running a new promotion. Not only can you get a free stock worth up to 350 dollars, but you can also get two more free shares on top of that, one with a guaranteed value of fifty dollars and another one with a guaranteed value of forty dollars. So that's at least ninety dollars in guaranteed free stocks, just for signing up with moomoo and depositing at least a hundred dollars linked in the description below. Obviously, mumu also have free real-time level.

Two market data they've also got advanced charting tools and, most importantly, for me, they've got 24 7 real-time, up-to-date financial news, so that i never miss a key headline that neighbor boy said so far: never updated. My transfer of gamestop shares to fidelity fidelity reached out multiple times and was finally given an ultimate statement. It said sofi does not have the cost basis for the gamestop security during that time frame, as in sofi never owned a single share. I am speechless, so it looks like sofi also failed to meet their margin, call or margin requirement from the dtcc and somehow worked out a deal with them not to go into the market and ever buy those shares.

Obviously, that's why sophie and robin hood and potentially other brokers out there as well, have been issuing you with ious when you purchase your stock, it seems like at the moment, there's tons and tons of people that have been trying to transfer shares into fidelity, but all These brokers, just simply don't have the shares. They also can't locate any and the most important part is they never even bought the shares in the first place in terms of where people like you, and i actually stand in this matter. Obviously, we have paid our money for those shares and we've legally entered into a contract with the trading platform for those shares and therefore they owe us that money. They don't owe us the value of money on the day when we purchase the shares, but they owe us the current market value of those shares.

For example, if you were to sell your shares on robin hood right now and draw out that cash, they would legally have to pay you that money and they're also covered under the sipc insurance as well, and when amc and gamestop do squeeze and you sell your Shares they will legally still have to pay you that same amount of money, though, where the problem arises is because robin hood never actually bought these shares. They don't have anything of actual value themselves to sell off to other brokers or other market makers, and therefore, basically, companies like robin hood, are going to have to stump up all of the cash out of their own pockets, which obviously they're not going to have. And this is where the sopc insurance and the dtcc step in to make sure they cover the losses of those trading platforms and market makers and any other institution that does go bankrupt in the process. Now i also wanted to talk about some interesting institutional buying of amc.

That's recently been reported over the last few days, although it's important to remember that, even though these filings came in over the last few days, these transactions were actually recorded somewhere between quarter two and quarter three, because obviously these are the end of quarter three filings and Therefore, somewhere between the end of june and the end of september, sumitomo purchased 1.4 million shares of amc and therefore clearly sees amc going much higher. On top of this, cutler group actually sold off 262 000 of their put options, and obviously a put option is a bet that the stock is going to go down. Therefore, basically, they feel that amc has gone the lowest it was going to go and therefore sold off those put options and actually even purchased some more call options expecting amc to go back up, and obviously this was their position at the end of september. So, at the end of september, cutler group did not see amc going any lower and thinks that it's going to go higher cutler group currently hold a whopping, 749 000 call options and only 399 000 options.

I'm really interested to see some of the filings from the bigger institutions like citadel and subscriber and jane street, and everybody else to see what they did with their amc shares. Their amc call options and their amc put options in the third quarter, and now i also wanted to talk about some brilliant amc news to do with june and also to do with halloween kills, because both of these films experienced hybrid releases, a hybrid release, is where A film is released at the theaters or cinemas like at amc and on streaming services like netflix at the same time, and therefore, despite the hybrid release june, has a strong box office performance june debuted with 40 million dollars in ticket sales in its opening weekend in North america, drawing a large number of moviegoers to see the thundering sci-fi epic on the big screen, despite it also being available to streaming homes, warner brothers launched the legendary entertainment production simultaneously in theaters and on hbo max the director of the film actually said. I strongly believe the future of the cinema will still be on a big screen, no matter what any wall street diligence says and june actually marks the biggest domestic opening for any of the studio's hybrid releases so far this year, and he said this was a tremendous Result as we're ramping out of the pandemic once we get out of the pandemic, if we have a movie like this clearly you'd want to see it in theaters. First, there's no question of that.

Similarly, to this michael myers made a huge amount of money at the box office over the weekend, halloween kills slashed up the competition with a whopping 90.9 million dollars a huge number for an october release. This amount totaled with the other films in the franchise, have now passed the 700 million dollar mark at the box office 90.9 million dollars is nothing to sneeze at for sure. This number turned out to be very high, despite peacock. Also having the film for rental at home, 90.9 million dollars for a debut weekend is absolutely massive, especially for a film that was also shown on streaming platforms.

Clearly, nothing can beat the big screen. On top of this, gamestop have also been advertising for some new careers, a senior software engineer for an nft platform with potential nft experience, they're also advertising for a director of product marketing for an nft platform in seattle and therefore it's clear that gamestop are trying to Diverse into the nft space - and i don't think amc will be too far behind this is a brilliant way to not only grow a new business line and potentially generate billions of dollars in revenue, but also it's a brilliant way to get a true share count for The number of real shareholders, because obviously, if gamestop and amc issue, one nft for every single share in issue, we will know very quickly just how many shares are truly out there. I also wanted to quickly touch on reverse repos and obviously it's been holding around the 1.4 trillion dollar mark for some time now, previously being around the 1.3 trillion mark. The interesting thing i wanted to point out is this: ever-growing purple line, which is the average reverse repo per party back in august and september.

This was around 14 to 15 billion dollars per party, but now it's sitting much higher around 18 10 19 billion per party. Clearly, at the moment, there's more and more parties out there more and more institutions that are struggling for cash on a daily basis and are needing to sell off their treasury agency debt or agency backed mortgage securities in order to get some cash in the door. And finally, i wanted to give a quick, wider market update as modern land becomes the fourth chinese developer to default on overseas debt. After failing to make a 250 million dollar bond payment, the chinese developer, which works on green projects, cited an unexpected liquidity issue arising from a number of factors.

Interestingly, this isn't just an offshore bond, but it's also an onshore and offshore bond as well with both stakeholders. Modern land also already tried divesters borrowing and adding strategic investors, but none of those worked and they couldn't get. The cash evergrande did make their 83 million bond payment last week, but they have another bond where the majority period expires. On october, the 29th, which is only a few days away, and therefore evergrande, is only a few days away from an actual default which will bring down the chinese property market and chinese financial system.

Guys be sure to. Let me know down in the comments below what you think about all of these trading platforms, never actually buying any amc or gamestop stock, and, as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted when i upload a new video cheers.