Today I Want to talk about how the market crash is good for the squeeze and is actually finishing these shorts? I Also want to talk about how the SEC can't actually stop these nefarious hedge funds even though they're The Regulators So stay tuned and let's make some money. And now I'm going to dive straight in with the key information. So I Want to start by explaining these nefarious short positions and how they will actually come to be liquidated in the future. I Want to explain what these shorts have actually done during the market crash and how they've averaged down their short positions. So we'll start by assuming that many hedge funds began shorting AMC at all-time highs around 75. Maybe these hedge funds were using 2x leverage or two times leverage. We know that's actually quite conservative as Citadel used leverage ratios of seven times and upwards. If a hedge fund is shorting AMC it's 75 dollars per share using a leverage ratio of two times leverage. That means that hedge fund would be margin called and liquidated if AMC runs to a hundred and fifty dollars. Now, that fund would be liquidated as they're borrowing external money from a big bank. This big bank doesn't want to lose any money and will therefore liquidate the hedge fund if they breach those margin requirements. Now, if we had to push AMC all the way to 150 per share to cause liquidations, it would actually be very difficult for us to cause the squeeze, especially as we can't get AMC above 20 or 30 or 40 dollars at the moment. But what these hedge funds have done during the market crash is average down their short position. And that's actually made it easier for us to liquidate those hedge funds. To push the price of AMC downwards, they've had to exert more shorting pressure and add to their short positions. Averaging those short positions downwards, many of these hedge funds would have been shorting AMC down from 75 down past 35 and Below. Therefore, many of these hedge funds may have an average short position of only 35, not 75. If the hedge fund is still using a 2X leverage ratio AK living increase their portion of the short position and the external borrowed money portion of the short position, their liquidation point would now be 75. That's because they've still kept that 2x leverage ratio, but they've reduced their average short position down to 35. That therefore reduces their liquidation Point down to 75 alongside. Now again, these hedge funds have had to continue shorting AMC Still, to push the price down, they doubled down, they've tripled down, and they've now quadrupled down on their AMC short positions. That means these hedge funds now have an average AMC short position of only 15. And if they've kept that same 2x leverage ratio, it now brings their liquidation Point down to only thirty dollars per share. obviously making it easier for us to liquidate those shorts. During the market run in 2020 and 2021, many hedge funds and many crypto funds averaged up their long positions by continuing to buy more stocks and continuing to buy more crypto. Many of these crypto coins or crypto exchanges have done exactly that. They continue to average up buying more and more cryptocurrency or more and more Bitcoin And now that Bitcoin has fallen, many of these exchanges and crypto coins don't have the liquidity and they are being liquidated. The exact same thing as these hedge funds. Many of these hedge funds like Tiger Global continue to average up their long positions during the run, But now these positions are falling. They're finding their fund down 42 billion dollars in a single year and the exact same or the exact inverses happening to these short hedge funds. Instead of averaging up their long positions, they're averaging down their short positions. During the market crash, they're having to add to their short positions to continue pushing the AMC price down. Therefore, not only are they pushing the AMC price down, they're pushing their average short down as well. And therefore these hedge funds have averaged down their short positions down from 75 down to 35 and now down to 15.. But what I'm wondering is right now, in November of 2022, have these hedge funds now push their average short positions down to only ten dollars per share? Obviously, if these hedge funds have a 10 per share average short price, that makes their liquidation Point only twenty dollars per share. And obviously that's assuming a small leverage ratio like a 2X leverage ratio. We know that actually in reality, many of these hedge funds are using a significantly higher leverage ratio like Citadel who are using a seven to one leverage ratio assuming a leverage ratio of only 5x or 5 to 1. That means these hedge funds can only suffer a 20 Max loss before the fund ends up being liquidated. And therefore, if these hedge funds really have averaged down their short positions down to only ten dollars per short or ten dollars per share, that means their liquidation point is only a measly. Twelve dollars AMC may only need to run from Seven dollars or eight dollars up to twelve dollars Before that next wave of massive liquidations kicks in. Push AMC to 30, or 40, or even seventy dollars and above per share. Therefore, by pushing the price of AMC down, it's actually made it easier for us to liquidate these hedge funds. Not only have they been pushing the price down, they've been pushing down their average short and therefore pushing down their liquidation Point alongside. Now, obviously I don't know the average short position of these hedge funds and I don't know their average liquidation Point either. Twelve dollars is obviously a while estimate just like picking a figure out of a hat I am positive their liquidation Point has been reduced during this market crash, but I don't know the exact figures or the exact liquidation point to an individual Cent or an individual Penny But Pippin Tammy is also added to that by saying that Ape is the best move that Adam Aaron has ever made. He said Ape immediately on day one, doubled the Shorts position and therefore again halfing their liquidation point. and when it does go up which it will, it will bury these guys. Obviously, by doubling the size of their AMC short position, it means they're using more of their fun to shore. AMC That means that AMC can have a smaller movement which would have a larger impact on their available margin. Bring them closer to liquidation Point even faster. And on top of that, cat Striker is tweeted saying that Doug Sifu is suing the SEC for trying to put new regulations on the stock market. She said the CEO of Virtue, the market maker, says the industry has created the most fair and competitive Equity Market for retail investors globally, but that same CEO of a market maker. the CEO of Virtue wants to sue the SEC because they're planning to change the regulations. This Bloomberg article says that Virtue is suing the SEC to get more details on their planned Market structure overhaul. It says in a Freedom of Information Act lawsuit far on Tuesday Virtue is seeking to compel the SEC to release details about its rulemaking process and steps that it's taken to get feedback from Market participants. But do you think they deserve information about the rule making process, including the sources of information received by the agency and the possibility of bias? But she likely wants to find out Gary Gensler's plans around payment for order flow and likely around regulation Sho as well. I Imagine right now: Doug Sifu is terrified about Gary Gensler making any changes to regulation Sho that could cause him to report his short positions or close out of those Ftds because he knows that if AMC runs at all, it will likely cleaned up liquidating Virtue Citadel and many other hedge funds as well. And therefore he's even gone to the extent of suing the SEC to try and ensure the SEC doesn't make any changes to those regulations. Alex I Think is ultimately why the SEC can't do anything to stop these nefarious hedge funds. If the SEC tries to make any changes, these market makers and hedge funds will just simply sue them. The SEC doesn't have enough money and doesn't have enough funding to stand up for itself and therefore has to bend over backwards for these market makers and hedge funds. Crush Double tweet is saying that he doesn't buy the lawsuit Doug wants to make it look like him and Gary aren't in bed together. He thinks the lawsuit is a ruse. Questionable said. it's all about the regulation Sho loophole and the stock borrow program which Gary is not ending or which Doug Sifu is trying to ensure that Gary does not end. Obviously if these regulation Sho loopholes like the market maker exemption are closed, that would obviously screw over many of these market makers instantaneously now. I Also wanted to show you this interview on CNBC how a former hedge fund manager right now is worried about liquidations and is worried about another Major Market event such as a big bank or a hedge fund failing their margin requirements and being liquidated. Actually, the first thing I look at when I wake up in the morning is typically I look at where credit default swaps are on Credit Suisse Deutsche Bank what the 10-year is doing in the UK not in the US and those are the things I sort of look at because I do The tail risk in my mind is another Lehman type moment which is I firmly believe you're going to get some kind of big financial institution in big trouble. Um, I don't think it's going to be one of the big Banks but I could see another Archer Ghost type of situation because so many hedge funds you know, 60 40 funds, parity funds, whatever you want to call them. They've gotten murdered on their bond positions and gotten crushed on their stock positions. so I think you could see something like that? So that's the tail risk. but you know there's a lot of other stuff like what's going on in the UK that I'm watching and Credit Suisse and Deutsche Bank are up this morning. Therefore, right now, this former hedge fund founder is worried about and he's convinced there will be another Layman type moment. He thinks there will be another large institution. Maybe it's not a big bank, but maybe it's a hedge fund that ends up going under. He said these hedge funds right now are getting killed on their bond positions and their stock positions. He knows these hedge funds are over leveraged and they are very, very vulnerable and therefore that is why he believes many of these hedge funds or one giant hedge fund could end up going barely up causing a major market. Then that would obviously be caused by these falling stocks. and buy these hedge funds failing to meet these new increased margin requirements and simply being liquidated. Now obviously, if one of these hedge funds does get liquidated, that will cause the price of AMC to rise, therefore liquidating many other hedge funds much sooner than usual because of how much they've pushed the price down over the last year year and a half. But guys, be sure to let me know what you think down in the comments below. And as always guys, be sure to ding that notification Bell because that way you'll be alerted when I upload a new video. Cheers.