Good morning, no no start over start over good, oh jesus, good morning, you bunch of beautiful freaking people. What is up? Everybody welcome to trey's trades, where we freaking talk fast and slap. The ass baby. I think breakfast by saying that i'm not a financial advisor and they're experts, so it's going to say the grain of salt, let's get into the video.

So today, my friends, my family, my fellow gorilla gang we're gon na, be starting off the morning. Talking about a loan recall right, so i'm actually gon na be reading this from some a little bit of reddit right and i've got this. This preface and sort of mapped out here on microsoft whiteboard, but i wanted to give credit where credit is due. This is a guy that is in my personal discord.

His name is late. Chuck late chuck threw together some freaking, really really solid uh due diligence and research that is backed by some actual documentation, which is solid. So i'm going to leave a link to this in the description box down below if you want to check it out, but this is some super intelligent, smooth, brained ape stuff and we got to talk about it. So without further ado.

Let's just get straight into the freaking video, so we're going to be talking about today is amc, the recall, and now what do i mean by this? A lot of people seem to talk about. Essentially, this idea of margin calls right margin. Calls are super super important to amc stock. You can think about it like this.

I i i freaking didn't realize my mic was off in this first recording, so i got to start over essentially, but think about this right. You've got a hedge fund out here. We're just going to call them citadel capital right. Citadel has 100 shares long in a stock, and they also have 500 shares short in a stock right now.

What happens if they're 500 shares short make them net profit negative on you know any given day they can get margin called and typically, what that looks like is not all the time, but most the time they give you x amount of time to meet the collateral Requirements in your in your account, so they don't liquidate you and if you can't they liquidate you right, they cover each. They sell your long positions and they cover your long positions and boom. Your margin calls you really get screwed long position. Stocks usually go down and short position.

Stocks usually make the stock go up when you cover right, but something that isn't really talked about is this idea of a forcible recall now? What do i mean by this? This is directly associated with the ortex data, the stuff that we talk about every single day. Now that sits right now, the ortox data set at 99.32, but there was a short period of time when you saw it drop down to 96 percent here right from 100. For weeks and weeks and weeks dropped down on 96 - and we didn't see any sort of you know price action during that period of time when you saw some of those shares online, get recalled or brought back or returned or whatever. The actual truth is because truth is, this is a hypothesis.

This is, you know, we can't prove it in the least bit, but this is very interesting data information, nonetheless to share, but nonetheless right, we saw that this happened. So i wanted to give you guys - maybe some correlation, not causation, that we have here in terms of research and how this could be tied together right. So essentially this paper - this is coming from a very, very intelligent guy. His name is paul schultz he's actually a professor of finance at notre dame and he puts together a really really solid, top-notch academic piece of research, and it's essentially talking about the risks of short selling.

How this is associated with loan recalls and utilization right and we're gon na dig into all this sort of stuff that you're not lost in the sauce, and you understand everything that we're exactly talking about. So essentially, you know professor schultz, paul schultz says truth selling is risky. He provides the data of why we all know that short selling is risky. It's because, obviously uh you know a stock has infinite upside for loss when you go short on it, but only a limited amount of downside for gains right so that that's that's a huge piece of why short selling is risky, but the more important and more interesting Piece is this idea of a forcible loan recall and it directly ties into this utilization rate, we're actually going to show you the similarities and how this ties into the ortex data right now.

Why is this important? So, let's just talk about short selling short selling. Risks are tied to utilization utilization. Is the idea of how many percentage-wise, how many shares that are available for lending are out on loan 100 of utilization means that all shares available for lending are out alone. Zero percent means that none of them are out on loan right, so it just gives you an idea of how easily available it is to borrow or loan a stock from a lender right.

So short selling risks are tied utilization on the proportion of shares available to land that are actually on loan. It's a proxy for the risk that a loan may recall force a short seller to close a position by using equal reduction in shares available to lend and shares on loan on the same day for most stocks. This is a rare event, a rare event, essentially saying that hey most of the time they get forcible recall of stock right, and this is going to get very freaking interesting. I'm going to tell you guys something really here in a little sec so for easily borrowed stocks, and you can think of this as anything that has less than a 75 utilization rate.

This is currently at 99.32 and has for a very long time so keep that in the back of your mind when you're looking at this right, so for anything under 75, you usually only have a loan recall once about every eight years. It is not very frequently that you see a forcible loan recall, so you can think about it like this right. If a stock is easy to borrow easy to be lent, typically, the chances of you being forcibly recalled whatever shares that you have out on loan right is low, and you can think about it very simply. It's how many shares are available for lending so that you can continue to have transactions and customers and clients that come in and borrow stock right, and what are the risks associated with having those shares out on loan? If there's high risk and there's not a lot of shares available to borrow you have a very high shot at getting your shares recalled and it's gon na get more interesting.

I swear to god, you guys are gon na be blown away, it's stupid, but this is stupid right for stocks utilization above 75 percent. Forced recalls occur about once every 26 days, so utilization is strongly associated with recall, risk holy toledo once every 26 days for something over 75 well check this out, guys very fascinating, because we've been at 100 or dang near close for literally a month check this out. 99.4 utilization, as of april 16th, it is currently may 25th. The lowest we have been in the last month is 96 utilization.

Now what happened right here right? What happened right here when we dropped down to about 96 utilization? Could it have been a forcible recall - and this is something that we really definitely need to talk about in terms of what is going on here with these loan recalls? Is they don't have to give you any sort of warning? That's the most interesting piece of this to me easily now. What do i mean by that right? Think about it like this. Let's just say that jimmy over here jimmy wants to go long on a hundred stocks right. He wants to go along 100.

Shares of amc bam. He buys 100 shares. Well, what would happen if, somewhere in the fine print of his brokerage, you know the brokerage said: hey jimmy, you can go along on 100 shares of amc, but at any time, if we decide that we don't have enough shares available, you know for for buying or The risk of you going long on a stock is too high. We're going to basically close you out.

We want those shares back right. What would happen? Do you think jimmy would want to buy that stock? You think jimmy would want to do it probably freaking, not especially if he knew there was a high chance that there's not a lot of stock available and a high chance that uh he's not going to be profitable on it. He probably wouldn't want to do that. Right, essentially, the exact opposite thing happening right now for hedgy hedgy over here, it wants to go short instead of 100 shares, freaking 100 million.

That's what the the shares alone has been as high as before. He wants to go short, 100 million shares on amc and somewhere in the fine print. When he's borrowing the stock and the contracts they they write. Whatever they freaking sign, they say: hey, look hedgie, you can go short, 100 million shares.

You can borrow 100 million shares if you want, but just know this right just know. If we don't have enough shares available for lending. We can recall your shares any freaking time that we want, and if the risk associated with you having a short position or having those shares on a loan, is too high the cost of borrow's too high. We can recall these at any given time that we want.

Would you want to borrow that stock, probably freaking not makes no sense and guess what guys guess what they still do it? They still do it, because utilization has been maxed out at 100. For who knows how god dang long i mean this is the longest. It has been this high that i have seen. I mean look at this trend.

Look at this. This trend line up here right highs, has been at 100 of the longest. It's been that high. It's way back here.

It has not been that high. This is the longest time you've seen this many shares out on loan, since amc has basically traded over the last year. It is absolutely absurd right, so this idea that they can. They can essentially recall your shares with no warnings in the least bit comes from ikbr or interactive brokers right, so essentially they don't have to give you any sort of warning.

This is actually coming from the professor of finance from notre dame paul schultz as well right. He puts this in his research paper without having a reason. The lender has the right to request the return of the shares at any time now. Shares are not numbered and the broker can give the lender back any amc shares, but if the event occurs that there are no shares to borrow left, the broker has a problem.

He has to find new ones if he cannot line it from elsewhere. The fun begins. Essentially, the loan recalls the forcible recalls of stock and i would not be surprised in the least bit. Obviously this hypothesis is speculation, but i wouldn't be surprised if you see this start happening very very very soon.

It's a prediction: i've got a prediction for you right. Sometime in the next couple weeks or months, i think you're going to start seeing some forcible recalls. The higher the amc stock continues to rise, guys the longer and longer and longer the amc is bullish. I mean just look at the last three months: guys the risk is ramping up.

This is getting really really risky for anybody who wants to be lent stock, whoever wants to short stock. Whoever wants shares on loan in this amc stock. It is absurd. It makes absolutely no sense so the longer this game plays out guys.

I think you're gon na see this utilization get forcibly recalled back simply based on the numbers right one every 26 days, that's for 75 or higher right. What that's absurd! I mean this: is this is groundbreaking stuff? I literally haven't heard anybody talk about this. I mean this could really really really really be a game changer in terms of getting shorts to be freaking underneath the firehose i mean this is pressure. This is pressure to a t, you're turning a big freaking diamond into a turd.

I mean you're, somehow reverse splitting atoms and turning turning these freaking diamond-handed. Who knows what hedge funds into putty i mean this is essentially what it is is hey. We do not have to give you any freaking warnings and we can. We can end your your freaking dreams and goals and financial financial strength.

There's one last thing: i want to talk about right and that's t plus two right. So this is the last big piece of the d that i kind of want to dig into. This is the idea of when stock is actually bought back right, so t stands for transaction date. Plus two indicates the time in our case two days how long after the transaction date, the settlement takes place right so think about it, like this return shares happens instantaneously.

So if, if a lender decides hey, we want to recall your stock, they get that stock back right, but the settlement right takes time plus two days now. What does this mean? If you were to look at the grand scheme of things? Let's just look at amc stock like uh, i don't know right here. For instance, let's say that there was some share recalls somewhere in this moment in time. One day, two days, you could have seen that the actual you know, transactions and the buying pressure took place.

Two days later right, because that's where the c plus two comes into place, true, they they instantaneously get their shares, returned they instantaneously, get them back, but the settlement time is c plus two, so it might actually take some time for the actual buying pressure of these Stocks that are being recalled to play into the equation to be bought back essentially right. So that's a pretty fascinating piece of the equation as well in terms of t plus two and how that can actually serve the overall game plan. Right only days are counted on which the stock market is open, so the borrower has a training day. He closes is forced to close his position plus additional two days to fulfill his obligation, so they get between then and two days later, in order to get everything squared away right, remember the or text tweet.

The shares returned today have not been bought today may 14th. Very freaking, fascinating stuff guys, and it kind of summed this up. Like likely chuck said this is a domino effect of loan recalls that could have started. I i believe it.

I'm gon na put myself out there, i'm gon na say it. I think the utilization sometime over the next couple of weeks to month is gon na drop significantly. I think you're going to see forcible recall on stock, forcible recall on loan right that is, going to start drastically dragging down short positions and forcing them to return lent stock return short positions, a little stack on top of these freaking. These margin calls that are on the horizon, guys and that's what i've got for this freaking video, so blah blah blah, don't let us feel drop a like consider, subscribing whatever you want to freaking do catch it all in the lunch break, live stream later today.

If you want to tune in much love to my friends, my family, my fellow girl, again catch you later and peace.