The CtB, FTD, SoL and Volume all interact on a daily basis, one can, but does not always affect the others. In the last three run-ups in them however, we have witnessed them acting in a concerted pattern like manner.
We are now in the third episode of sky rocketing Cost to Borrow and FTD generation. On 2/22 CtB topped out at 731.6%, on 4/12 it was 979.68%, on 7/7 it was 947.53% (data from IKBR).
Those represent the peeks of the Cost to Borrow over the last three times we have been on the Threshold List this year.
The volume in these instances seem to share a similar pattern in that the preceding four days appear to be normal or average volume amounts, with the last day showing a large spike in volume and correspondingly a drop in share price. It is interesting as it implies that the average volume preceding the spike was itself generating FTDs as well.
While that may not seem significant, if we take 2/3 when we first went on to the Threshold List the volume for the previous 4 days averaged around 40m. It requires 2.5m shares for AMC to get on the list. Taking the average volume it means that a minimum 6% of all volume on each day failed to the deliver. In the following two run-ups the problem only gets worse.
We also see the pattern of Shares on Loan decreasing.
In the preceding spikes (Feb, April, June) the Shares on Loan data begins a slow decrease in the amount on loan, from 200m down to around 150m. Short Interest as well typically decreases about 4% over the course of the spike.
As these shares are on loan and not directly shorted, it indicates they are being used for a difference purpose. That could be swaps, futures contracts, or some similar “bespoke” financial skull fuckery.
We see AMC go on the Threshold List, in the following days the Cost to Borrow skyrockets, the non shorted Shares on Loan decrease and we climax (so to speak) in some big ass volume candles usually to the downside.
When we consider the similarities for each of the three run-ups a relatively clear pattern starts to emerge which further confirms that this is not natural buying and selling pressure.
A fact I’m sure many of you already suspect or believe, that what we are seeing is not natural or to use another word, manipulated.
As it relates to the Cost to Borrow, I see many people crowing who would even borrow at those rates, they are getting destroyed. That only applies if they hold it for the full length of a month or more. It may also not apply to previous loans depending on the contract. In this instance, the Cost to Borrow is acting as a risk barrier to new entries, rather than a lack of shares. Remember that shares on loan decreases, we also typically see the shares available to short go down as well. So it is important to remember that shares do exist, but are likely not being offered. That further supports a thesis that these are a part of a securities arrangement in swaps or other such nonsense.
Now, what does it all mean? well, when we take all that data and put it together it should mean AMC will come off the Threshold List on or about 7/14 or 7/17 if the pattern plays out and nothing interrupts it (like Judge Zurn making an earliest possible ruling).
Of course I didn’t just write all that to tell us when we’d come off the Threshold List, in each of the last occurrences there was a price spike afterwards, followed again by the price dropping.
Now, throw it all together and it appears we have an outside influence attempting to drop the price of the stock through purposely generating FTDs. That it is being done outside of the lit market and I suspect the ATS/Off-Exchange as well, leads me to believe this is swap or swap like in its origin, a very Archegos type of attack via synthetic shorting. Combine that with the CFTC once again saying no public reporting on swap data is available, I’m further thinking this is swaps and through a lack of reporting is under the radar to Regulators (not that I have faith in them anyways).