Today I Want to talk about how we are bankrupting Citadel every single time that we place a buy order I Want to talk about how Citadel's Market maker exemption actually works both ways and how this creates a massive liability for Citadel that will only continue getting larger and larger. So stay tuned and let's make some money. And now I'm going to dive straight in with the key information. So you may have seen this tweet from 741 Trey attaching the screenshot saying not for sale that shows the details for the GameStop stock showing the current trading price, but it also goes one step further to show the closest bid price and also the closest Ask price.

As you can see, there's a massive 26 dollar spread. This basically means there are willing buyers at the 19 level, but only willing sellers at the 45 level. This is because there's such little volume in GameStop and so few sellers actually want to sell their GameStop stock on the cheap. Obviously, both GameStop and AMC is majority held by retail investors who will not sell their stock at the moment.

Now, I'm sure you can all agree that you wouldn't be selling your AMC shares for anything less than 45 dollars. Hey, I'm sure many of you won't be selling for any less than 100, maybe 500, maybe a thousand or even higher. But so how does this massive spread between the bid price and the ask price create a giant liability for Citadel? Well, as part of Citadel's Market making exemption or as part of their role as a market maker, they have to facilitate both purchases and sales. Now, obviously, when they're trying to facilitate sales or facilitate shorting, these market makers can take advantage of their Market maker exemption and engage in naked shorting, but it also works the other way around and they have to facilitate our purchase orders, creating a giant liability for Citadel.

But let me read through this and explain further. So it says that Naked Short Selling is not necessarily a violation of the federal Securities laws or the commission's rules. Indeed, in certain circumstances, Naked Short Selling contributes to Market liquidity. For example, broker dealers that make a market in a security generally stand ready to buy and sell the secure on a regular and continuous basis and a publicly quoted price even when there's no other buyers or sellers.

Thus, market makers must sell a security to a buyer, even when there's a temporary shortage of that security available in the market Now, selling securities to you. and I when they don't actually own them actually creates them a giant liability because they have to go into the market and buy AMC shares at some point to close out of that market, making exemption and fulfill their obligation. Not only do they create shares when somebody wants the short the AMC stock, but they also effectively create shares or issue us and IOU when we want to buy and they can't find anyone to sell. Obviously, by them creating that IOU and selling us the share when they couldn't find anyone that wants to sell, it creates a liability because they have to buy back those shares.

It says this may occur. For example, if there's a sudden surge in buying interest in that security or a few investors are selling the security at that time. Okay, is a perfect example. Right now, there's obviously very few investors willing to sell the security.

Therefore, it creates it now a giant giant liability. They have to continue fulfilling our buy orders as a market maker, even if they can't find anyone willing to sell. And because it may take a market, make a considerable time to purchase or arrange to borrow that security. a market maker engaging in Bona Fide Market making particularly in a fast moving Market may need to sell the security short without having arranged to borrow shares.

And I Think that's effectively how Citadel have such a giant liability for security sold and not yet purchased at fair value. Included in this figure isn't just those shares they've created to facilitate synthetic shorts, it's also shares or Ious they've given to us when we wanted to buy shares. but they couldn't find anyone to sell. And obviously, if they can't find anyone willing to sell AMC shares at four or five or six dollars a share, this liability will continue getting larger and larger.

So let's go through the actual math in terms of how Citadel actually has this giant liability that they need to fulfill. Also, guys, be sure to join me over on MooMoo the sponsor of today's video. Using the link in the description below, you can currently get up to 15 free shares entirely commission free trading Free level 2 Market data and MooMoo is also very easy to use with a very user-friendly UI They also have tons of technical indicators and best of all, advanced charting tools. So I'm not sure what the current real bid asks spread for AMC actually is, but let's assume there's buyers or bidders at 4.50 the current traded price, but let's say there's only asks or sellers at twenty dollars per share.

Now for me personally, I don't really want to sell AMC shares at twenty dollars per share. but I imagine some paper hand is my my personal intention is to sell AMC for much more obviously than 20 per share. But let's assume for the moment that 1 million share buy order comes in at the current trading price around 4.50 Obviously Citadel can't find any sellers willing to sell shares at 4.50 because the first seller isn't willing to sell until twenty dollars. Therefore, Citadel has to sell some shares at that four dollar and fifty cent price point to those buyers.

But it therefore has a one million share liability or a one million share I owe you. Because they couldn't find any sellers for those million shares, they had to give the shares to the buyers. but effectively create that IOU as they couldn't find any willing Sellers And obviously as more orders come in, let's say there's another million share buy order, then a 5 million share buy order, and many more orders. After that, it effectively creates more and more shares for so they're able to buy.

And obviously Pursuit that I would ever get a chance of reducing that liability Citadel effectively has to wait for paper handers to sell their shares. If somebody paper hands it sells at that five dollar price points. If they don't can buy those shares at five dollars per share and reduce their liability. But obviously I assume that there's more buyers buying AMC shares than there are paper Anders paper handing aims he shares and therefore the longer they weigh or the longer that we wait, the bigger the liability gets.

That's why over the last few years, this figure for security sold and not yet purchased has increased from 2 billion to 5 billion to 10 billion to 20, 30, 40, and now 65 billion. Now this is from Citadel's 2021 financial statements and I do believe the 2022 accounts will be released over the next week. I Imagine this liability is probably increased again fairly substantially, potentially pushing towards 70, 80, or even 90 billion. Now as part of Citadel's market-making exemption, they are allowed to sell us these shares even if they can't locate any sellers.

But at the same time as this liability continues to inflate larger and larger. effectively, Citadel's cash resources will end up dwindling until their liabilities exceed their assets and obviously a balance sheet has to balance. So if the liabilities continue increasing for Citadel, it effectively means they're going to take on more and more losses to obviously cause this balance cheat to balance. Basically meaning that at some point in Citadel will have to close out of this security, sold and not yet purchase position by buying back millions of AMC shares.

If their liabilities continue to spiral out of control, they either have to generate more assets or take on more losses, effectively bankrupting the company. And obviously, a Citadel gets closer and closer to that bankruptcy point. We effectively get closer and closer to the squeeze. And I think that's also precisely why many of these mainstream media Outlets are trying to convince us to waste money on weekly options and also paper hand our shares.

When we're wasting money on weekly options, it means Citadel can increase their assets by generating more money and obviously the more AMC investors, paper, and their shares, It means that Citadel can buy back those shares on the cheap, reducing their liabilities. And that's why you have places like Benzinga talking about short squeeze volatility in 2023. As Crystal Ball tweeted, he said, you know when short squeeze volatility starts, so stop trying to trick people into playing weekly calls and losing money on weekly options. This article says that AMC among other meme stocks are seen marked continued short squeeze volatility throughout 2023.

And according to data from Benzinger Pro AMC stock has a total share flow of 515 million shares, of which 118 million are sold. Sure, Ben Zinger is obviously trying to convince you that AMC is currently experiencing a short squeeze in there for you should buy weekly haul options. Alternatively, they're trying to suggest that you should buy AMC shares and potentially paper hand them at a later date if you miss out on a squeeze, which is obviously exactly what Citadel wants as their liabilities spiral out of control and their assets begin to dwindle more and more. But something that I find very, very interesting is the fact that we're continuing to experience more and more price glitches.

Chris tweets saying how does this happen? How can Bank of America hold shares an average cost of four thousand dollars per share right now Bank of America hold 139 1000 shares with a latest disclosed value of 566 million dollars. And obviously, if you divide 566 Million by 139 000 shares, that's an average price paid for Bank of America of four thousand dollars per share. First, Crystal Ball tweeted, He said, well, well, well, another day another glitch and actually there's four separate glitches or four separate filings this time round. So obviously we've just seen that Bank of America are holding 139 000 shares with a value of 566 million dollars.

But we're also seeing Credit Suisse holding 450 000 shares with a latest disclosed value of 1.8 billion. Again, that's around four thousand dollars per share, which is apparently the price that credit Suites paid. And again, Charles Schwab is holding 3.4 million shares with an approximately disclosed value of 13.8 billion dollars. Again suggesting that Charles Schwab also paid four thousand dollars per share.

And again, you guessed it, we're also seeing Goldman Sachs holding one 1.9 million shares with a total value of 7.8 billion dollars, Again suggesting that Goldman Sachs also paid four thousand dollars per share. Fintel is clearly suggesting the current trading price for AMC isn't four or five or six dollars per share. Finto believes that AMC is currently trading at four thousand dollars per share. It seems crazy how AMC is one of the only stocks that seems to experience these price glitches all at the same time when Citadel's liabilities are spiraling out of control and Citadel the fund is getting closer and closer to bankruptcy.

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.