Welcome back to the channel everyone today, i want to talk about how the amc synthetics will be brought back and closed out and not reset so stay tuned and let's make some money, and now i want to dive straight in with the key information. So, firstly, i want to say this is a video back at lou after his video that he made towards me the other day. Lou is absolutely right. I don't have a background working on wall street, but, interestingly, what i do have is a background working in accounting.

As i've been an accountant for the last eight years now, i wanted to say that lou is absolutely right. This is an accounting problem that they need to resolve. Every transaction. That starts must finish.

There must be two sides to every transaction for the transaction to be properly completed. For example, if a trade is opened that trade has to be closed now. Lou is also right. I'm from the uk and the uk works very differently to over in the us.

So maybe i'm just not understanding everything, but today i wanted to walk you all through a short transaction to determine how a short actually works and how a synthetic share is actually created and then how a synthetic share must be closed out for it to be properly Resolved now, very simply, if you're going long on a certain share, you start by owning zero shares. You buy one share, you sell that one share and then at the end, you've got no shares left. So you've started the transaction here by buying that share and you've finished or closed out the transaction by selling that share and you're back to the starting position. Now, if you're shorting a stock, it works slightly differently.

Typically, you start out owning zero shares. You borrow a share from somewhere else. If you can locate it, you then sell that share that you borrowed you buy it back. You then return that share and therefore you then don't own any shares.

You've started that transaction by locating borrowing and selling that share, and then you finished and closed out that transaction by buying the share back and returning it so that you're left with nothing now, obviously, primarily where the synthetics are created, is because the market maker failed to Locate a share to borrow, and they just let the hedge fund sell the share without first borrowing it, but obviously to close out this short transaction, whether it's a legit short or whether it's a synthetic short, they still have to buy the share back and either return. It or cancel it if it's synthetic, so i guess in some senses lou is absolutely right. They do have to return or cancel that synthetic share in order to complete or close out that short transaction. But i think this part here in the middle is absolutely crucial.

Every single synthetic share that has been created has been sold to a regular retail investor like you and i, and therefore for these synthetic shorts to be properly closed out. They have to be purchased or bought back from regular people like you and i and then either returned or cancelled to properly close out that short or synthetic shore, so for all these synthetic shorts have actually done is failed to borrow the share, create the synthetic share And then sold it to regular retail investors like you, and i - and this is where i think lou and i slightly differ. Luke seems to think that the sec will only make those shorts buy back 513 million shares and return. Those 513 million shares shorted now.

Obviously, lou said that it might only be 400 million shares because maybe 100 million shares are owned by insiders and by other institutions and therefore it's only the 400 or so million shares that we own that have to be bought back and returned. But this is where i think from an accounting perspective, that it doesn't really make sense if they've created 2.5 billion, synthetics or 20 billion synthetics or a billion synthetics, and then sold those 2.5 billion synthetics to regular retail investors like you and i, but they've only bought Back 500 million shares or 513 million shares. That means at the end of the day they still hold 2 billion synthetic shares. Therefore, they won't have closed out of their full synthetic share position and the accounting wouldn't really work on this they've created 2.5 billion shares, but only returned or cancelled, 500 million of them and therefore they're not all square at the end of the day.

They're. Not in this position of having fully closed out of their short and synthetic short position and owning zero shares, they still hold around two billion shares. Now, okay, i guess you could say yep tom. That is the two billion shares that will just be cancelled by the sec, the dtcc, the fed, whoever it is that's going to cancel the shares.

But then again i think we've still got a bit of a problem because there's still going to be these 2 billion shares that are held by regular retail investors like you and i obviously, if the shorts created 2.5 billion synthetics sold all of those 2.5 billion synthetics To regular people like you and i, but only brought back 500 million of those shares, the regular retail investors are still holding 2 billion synthetics and obviously, if the sec, the dtcc or maybe it's the market makers or the hedge funds that actually cancel these two brilliant Synthetics then they'd effectively just be disappearing from our brokerage accounts, and this is where i was getting at the sec. Just don't have the jurisdiction to do this, because obviously many of these two brilliant synthetics are going to be held by retail investors in the uk in europe, in australia in asia everywhere else around the world, guys, if you're worried about holding your amc, infidelity or an E-Trade due to all the recent glitches and the fact that fidelity actually supports short sellers mumma are currently buying you, a free share of amc on top of their usual five free shares when you sign up to moomoo, using the link in the description below and make Your first deposit, when you sign up with moomoo and make your first deposit, you get two free shares, valued for three thousand five hundred dollars, and if you can deposit a hundred dollars, then you also get a free share of amc bought specifically for you and guys. If you can deposit the full two thousand dollars, then you also get an extra three free shares, valued at three thousand five hundred dollars. Each memo is also a brilliant commission free trading platform that doesn't make its money from payment for order flow, moomoo and future make their money from margin interest and from payment fees.

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Maybe these 2.5 billion synthetics have actually been created, but only 500 million of those shares or of those synthetics have been sold to retail investors. They buy back those 500 million and therefore there's only two billion synthetics that are just floating around in the ether. Maybe these additional two billion synthetics that were created were never actually sold to retail investors. They were just created and marked to short, therefore impacting the amc price, but they were never actually sold or given to retail investors.

Maybe this is me being from the uk, or maybe this is my lack of understanding of the overall market, but i was under the impression that the total 2.5 billion shares and synthetics had been sold to retail investors. I think if the total, 2 billion synthetics or total 2.5 billion shares have been sold to retail investors, then they can't just simply be cancelled. They need to be properly purchased back and returned or cancelled in order to properly close them out. But obviously, if these two brilliant synthetics have just been created and never sold to retail investors - and they just float around in the ether, then in that case they can definitely be cancelled.

But obviously, i'm under the impression, the entire 2.5 billion real shares and synthetic shares have all been sold to retail investors and therefore every single share needs to be purchased back in order for it to be cancelled and properly closed out and therefore, obviously, while the sec Can't just cancel all of the shares that we hold in our trading accounts. One thing they can do is definitely halt the trading of amc for up to 10 business days. They may end up halting amc at 73 or 100 or 200 or 500 or whatever that price is and try and convince people to sell their shares for the shorts to close out, but i think doing that would be quite risky for the sec in some sense. Obviously, if they halt the trading, it doesn't necessarily incentivize us to sell the shares, but also what it doesn't do.

It also doesn't incentivize the shorts to actually close if the sec hauls, the trading and those shorts don't end up being liquidated. What incentive do they have to actually close their short positions? Why wouldn't they just hold the shorts and continue trying to push the price of amc back down, but obviously, if the sec lets amc run to new highs, then those shorts will end up being liquidated and they'll be forced to cover and they won't be given the Option now i guess you could say that it's not just the sec, that's involved anymore. It's also the department of justice and the fbi and they've got a bit more leverage in terms of forcing short sellers to properly close out of their positions. But i guess, as lou also said in this video, how do we know if the shorts have properly closed out their synthetic shares? How do the fbi, the department of justice and the sec properly know that those shorts, those synthetic shares have properly been closed? We know if legit shorts are being closed out because those legit shorts, while it's self-reported, is actually reported to finra, but obviously synthetic shares are never reported to anyone really and therefore not only would we not know if the synthetic shorts have been properly closed out.

Neither with the department of justice, the fbi or the sec, i think the only real surefire way to ensure the synthetic shares are properly closed out is if these short hedge funds are actually liquidated, because then, at that point, a third-party accountant or a third-party liquidator is Appointed for them to ensure that all of the positions are closed. They ensure that all of the positions are closed, not just the legit positions, but also the synthetic and any illegal positions they have as well. A fund needs to be properly wound down and properly zeroed out before it can be officially liquidated and officially struck off, and therefore i guess the only real way to ensure that all of the synthetic shorts and the over leveraged shorts are properly closed out is for The sec, the department of justice and the fbi to allow amc to run and properly squeeze to ensure that all of the shorts can be liquidated and properly closed. However, i do also agree with low and i do think it's important to be sensible to ensure that you yourself don't end up getting vaporized.

Obviously, the sec needs these shorts to be liquidated to ensure they're properly closed out, but as soon as those hedge funds do end up being liquidated, the sec can halt the trading at any time. The sec could quite literally halt trading as soon as these hedge funds are being liquidated, to ensure that everything is managed and everything is organized and to ensure that nothing gets too out of control and therefore, if you're not being sensible and you've got your personal bracket Set wildly too high, you will end up being vaporized and you won't end up being able to sell the sec, will effectively just haul trading and you'll effectively miss your chance, but i do think it's very important for everybody to have their own personal brackets and their Own personal opinions, obviously my brackets are slightly different and slightly higher than lose, but that's okay, because they're, my personal brackets, maybe i'll end up being vaporized or maybe i'll still be able to sell. But this is also what i've suggested. Many many times that when you set your personal brackets, you should set a number of different brackets.

You should sell in multiple increments on the way up and not save all of your shares to be trying to sell at fifty thousand dollars a share or a hundred thousand dollars a share or a million dollars a share or whatever it is. Maybe you should sell some shares at 300, a share just to ensure that you lock in some profits. Maybe you sell more at 500 or a thousand, or only a 100 or a 10 000 or a 50 000. Everything is up to you at the end of the day, but overall i do think it's important to be sensible and set multiple different brackets and multiple different sell points just to ensure that you sell as many shares of amc as possible during the squeeze and not After the squeeze, when the price comes rocketing, back down, guys be sure to, let me know down in the comments below whether you think that amc shorts will be closed out or reset, and as always guys.

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