Welcome back to the channel everyone today, i want to talk about some new changes to some existing occ rules. Now i haven't actually covered these rules on my channel before so i also want to talk a little bit more in depth about those so stay tuned and let's make some money, but before i dive into the video, if you haven't already be sure to sign up To moomoo using the special thomas jim's investing promotion. Not only do you get a free stock worth up to 350 and not only do you get a second free stock with a guaranteed value of 50, but you also get a third free stock with another guaranteed value of 30. On top of that.

So if you sign up to moomoo and deposit at least 100, then you get that third free stock as well. That's at least 80 in guaranteed free stocks that you could sell and buy at least two shares of amc with entirely for free, and i want to dive straight in with the key information. So while everyone is talking about robin hood and citadel pre-jury, the occ is proposing real changes concerning occ's governance agreements. They want more power in delaying immediate liquidation over suspended clearing members margin deposits and more so.

This introduction - or this first large paragraph here, is the occ requesting of the sec for them to appoint a non-executive chairman, as well as their executive chairman and also a management director, and to also clarify the roles and responsibilities of each party. So if you didn't actually know the occ stands for the option clearing corporation, so obviously they work quite closely with the cftc and also with the dtcc and other member bodies like that. So the occ also proposes conforming changes to its rules concerning the following responsibilities, which would remain solely with the executive chairman, as well as the ceo and the chief operating officer. So basically just saying the non-executive chairman doesn't have any authority to the following few rules.

Now i haven't actually spoken about these rules before on the channel, and i do think it's really important to speak about them, as they are rules that are currently in place, they're not being voted on. They already exist and i think, from reading these rules over, you can very easily get the wrong idea, but i think we have to look at it from an alternative angle that i also want to tell you about so rule 1104b, which concerns the authority to delay The immediate liquidation of a suspended clearing member's margin deposits and to use such deposits to borrow or otherwise obtain funds from third parties and to be a bit more specific rule 1104b, provides for an exception to the requirement that margin assets be promptly liquidated. If the executive, chairman or president determines that such liquidation would not be in the best interest of the occ, the clearing members or the general public, so this basically gives the executive chairman of the occ authority to say ah look at that hedge fund: it's got no Cash left and it's in a significantly negative position on their short positions, but we're not going to liquidate their assets yet and make them cover their shorts because we give them that exemption now. Obviously that sounds very, very bad for the amc squeeze, but i don't quite think it's that straightforward, i'm going to read through the other rules quickly and then explain why it's not quite that clear cut rule 106e, which concerns the authority to determine not to close out A suspended clearing member's unsegregated, long positions or short positions in options or bounds, or long or short positions in futures and again to be a bit more specific.

Notwithstanding the preceding provisions of this rule, if an executive chairman, the ceo or the coo, shall determine in his discretion, taking into account the size and nature of a suspended clearing member's position, the market conditions prevailing at that time and the potential market effects of liquidating transactions That might be directed by the corporation and such other circumstances, as such officers deem relevant that the closing out of some or all of the suspended clearing members, unsegregated long positions or short positions in options or bounds or long or short positions and futures would not be In the best interest of the corporation other clearing members or the general public, such positions need not be closed out, and i think the really important part of this rule is where it says, taking into account the size and nature of the position. The market conditions at that time and the potential market effects or impacts. So therefore, maybe the entire position won't be liquidated all at once. If there's a market crash - and i think this is a little bit more specifically what rule 104b is getting at - but there's also rule 106f concerning the authority to execute hedging transactions to reduce the risk associated with any collateral or positions, not immediately liquidated or closed out.

So again, to go a little bit more in depth with that one. If an executive chairman, the ceo or coo, determined that the corporation is unable for any reason to close out in a prompt and orderly fashion, any of those long or short positions, bounds or futures because of a market crash, such officer may authorize the execution from time To time for the account of the corporation, some hedging transactions, including without limitation, the purchase or sale of underlying interests or interesting, similar thereto or options, contracts or futures contracts or any such underlying or similar interests. But importantly, it has to be solely for the purpose of reducing the risk to the corporation resulting from the continued maintenance of such positions or the continued holding of such margin deposits. So basically, what this is getting at is if liquidating citadel is going to crash the entire market and basically blow up the occ.

Basically, the occ can use all of the members capital to go massively massively long on amc and then they can liquidate citadel soon after it squeezes and they make tons and tons of money. So actually these rules aren't that bad. It's basically saying that the executive chairman of the occ can temporarily pause the liquidation of a giant hedge fund. Just so the rest of the institutions can go massively massively long on this certain stock or basically take the opposite position to that liquidated institution.

And then, once everyone is happy with their positions, then they can commence the liquidation and actually, if we have a look at these rules directly on the occ's website, it says in the event, the correspondent clearing corporation has ceased to act for a common member and has Not accepted related delivery obligations, occ will first seek to minimise disruption to non-defaulting members through the use of liquidation agent services, allowing the related activity to continue to settle at the nscc on its original settlement day. And it says if the occ is unable to utilize its liquidation agents. The occ may instruct non-defaulting members to settle the delivery obligations on a broker-to-broker basis or to close out such obligations through the issuance of buying or sell out instructions to non-defaulting members, and it then talks about how the members can use private auctions to buy off the Assets of the defaulting members in a way that doesn't cause a massive market crash. So basically, if someone like citadel gets liquidated for having massively over leveraged shorts that move against them in a big way, they don't have to sell off their very large long positions on, say, apple or amazon and crash the market.

They can be sold privately to someone like blackrock at a massive discount and another post says. If i remember correctly, the whole point of this is so that when the entire market starts to collapse, and hedge funds and banks get margin called and liquidated, all of their collateral can transfer to the occ for sale and in a staggered manner. So that not all of it is dumped onto the market at one specific time, crashing the entire market and destroying our economy and there's a comment saying: let's clarify two points here: since they are creating some fudge. Nowhere does it say they don't need to cover and how they cover is not of our concern.

Those rules aren't saying that they're, basically going to save a hedge fund or an institution from bankruptcy and liquidation, they're still going to get liquidated. It's just going to be temporarily paused and staggered so that it doesn't crush the entire economy. So basically, i think that these rules kind of play hand in hand with real nscc, 2021, 0-1-0 and also 803 as well. I think these rules and 803 and 01-0 are kind of more about preventing an entire market crash, but still making sure those institutions do actually get liquidated.

It's just making sure they get liquidated in a way. That's staggered and also in a way that the rest of the institutions can take the opposite position and basically profit massively from them getting liquidated, and i also wanted to clear up some thud that i've seen going around about this article here. Amc short sellers recover 1 billion dollars in a little over a week, but obviously there's a lot of very confusing data here. So i want to break it down.

For you short sellers, betting against amc. Entertainment have managed to recover a substantial portion of their losses over the course of the previous week, which isn't really quite true. Amc and gamestop became the center of a tussle between retail and institutional investors earlier this year after the former united to purchase the company's shares in bulk to create an upward momentum in the shared price. This resulted in the institutional hedge funds taking heavy losses since they had placed their bets expecting the share price to drop.

These bets, collectively known as short selling, have been a source of controversy in the market, and fresh data reveals that the short sellers recovered losses exceeding 300 million dollars over the course of this week and more than one billion dollars. Since the end of the second week of the month, and now this article really pins around the data, that's published by s3 partners, obviously they revealed that during midday trading on friday, year-to-date losses of amc short sellers stood at 3.74 billion dollars, but it then also says The losses stood at 4.19 billion at the start of this month and therefore, this article claims that the shorts have made a 300 million profit, which i guess, while yes, their losses, have gone down from 4.19 billion to only 3.74 billion. That's still a very, very substantial loss that they are still yet to recognize. The shorts obviously haven't yet covered and taken that 3.74 billion dollar loss and therefore, when amc does start running up over the next few weeks, that 3.74 billion loss is only gon na get significantly bigger.

If there's something we've learned, it's that shorts aren't very intelligent and don't like to cover their short positions. There are some shorts that were shorting amc from 72 dollars all the way down to 30, but they still didn't yet cover their short positions, even though they were sat on massive unrealized gains because they were trying to hold amc all the way down to two dollars. A share and obviously amc did not reach two dollars a share last month and therefore they continue to hold that short position from 30. All the way back up to 52 losing significant amounts of that unrealized gain.

If there was some smart hedge funds out there, they should have been shorting amc from 72 dollars and covered it at say, 32. or 30, but actually most of those hedge funds that were shorting. Amc at 72 did not cover at 30 or even 29, and continue to hold it all the way back up to 52., and therefore this article that says short sellers have recovered. One billion dollars is fud really because their unrealized loss has gone from four billion to three billion.

They haven't made a billion profit they're still in very, very heavy losses now. Finally, i also want to touch on the us treasury and their daily updates, because on thursday we had a very, very interesting update. The u.s treasury opened the day with 272 billion dollars, but in one day spent 98.76 billion dollars and therefore closed on thursday, with 173 billion left, we've seen fairly regular outflows of 20 billion dollars in a single day and therefore there's potentially less than 10 days left. Potentially, less than nine days left before the us treasury is completely out of cash.

Also, looking at those reverse repos, we've still seen it maintain over 1.3 trillion dollars in the overnight repo facility, as a friday guys be sure to. Let me know down in the comments below what you think about those new occ rules and whether they're good for the amc squeeze and also while you're down there be sure to sign up to moomoo using the special thomas, james, investing promotion be sure to open an Account and deposit, at least a hundred dollars, to get that additional free share with a guaranteed value of 30 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.