Oh, we got something new first time. I've ever done this you guys have to. Let me know what you think in the in the comment section down below, but welcome to freaking naked ape review baby. Today's uh naked shorts are going to be the taco shorts coming in fresh from your boy trey from trey's trades.

How are we doing? I think previously. Obviously, i'm gon na find advisors, not financial advice, but today we're gon na be looking at something that melissa lee had put out so miss lee was the first kind of person on cnbc that released any sort of notion about naked shorts. The infamous clip she came out and said naked shorts yeah, which got this huge spark of excitement and frenzy over twitter and throughout the ape community that are watching amc stock and there's a really interesting piece that she talked about here on cnbc. That, i think, is kind of worth, highlighting and reviewing there's going to be some pieces in here that maybe i agree with.

Maybe i don't, but i'm just going to give my thought process on this entire thing. It's going to be a lengthier video. This is a 10-minute interview, i'll try and keep it as short as we can, but, like i said you guys, let me know in the chat bar or the comment section down below what you think of this whole thing. So without further ado, let's get into the video fears of a regulatory crackdown, sending reddit stocks down big today last night, gamestop disclosing that the sec is looking into the recent volatility in its shares that, after sec, chair gary gensler announced plans to review the current market Structure specifically, if you're not aware who gary gensler is, he is a new chair of the sec that is looking into the entire market, essentially looking for different manipulation, volatility, possibly naked shorting, any sort of malpractice, corruption or financial treason that could be taking place.

So he can crack down on it and make this a more free market for everybody else in the uh. You know the retail investors out there in the market, space specifically payment for order flow, and on monday the sec announced it is looking into any disruptions of the market of manipulative trading or other misconduct when it comes to some recent high-flying name. So, as the fcc turns up the heat, what exactly will they be looking for? Let's bring in lisa braganza former sec branch chief lisa great to have you with us thanks for joining us. Thank you so much it's great to be here.

I think that there's a big question among some of these. You know retail traders who are in these high-flying stocks as to what is going on in the markets and whether or not their concern is real or not. It is pervasive. So, let's go through the numbers here: according these are gary gensler's numbers, 53 percent of total trading happens on public exchanges, which means that 47 does not 9 happens in the dark pools.

Do we know? Does the sec know what actually happens in these dark pools? So, what's she talking about right, so melissa lee, as i mentioned, she's the the co-host here on the left. She essentially slipped up on cnbc one day and brought up naked short selling right, essentially the thought process behind uh people who short a stock with stock. That does not presently exist. So, hypothetically speaking, there's 100 million shares that exist floating on the market and you decide to short 110 million.

Those extra 10 million would be naked shorts. They don't exist. This is an illegal practice ever since the financial crisis, you know way back when and uh. This is something that's you know trying to get crack down on what the sec is looking into, and what she's talking about right here is this idea of public trading and she actually goes on the co-host or the guest here.

I should speak uh on. What's actually going on with these uh, these off exchange uh transactions that are taking place so 53 percent be total trading exchanges that refers to you know the new york stock exchange, the the nasdaq right just normal everyday exchanges that the market was built to handle. So we'll just continue on through this video, i want to give you a little bit of an update in case you don't know what this all means. The lcc has the ability to be able to look into that.

The problem is that you know for this large portion of trading that isn't occurring on the public market. It's gumming up the works. The the way that um the markets were set up was with an expectation, and then the regulations are set up was with an expectation that there would be public trading and that the prices um that stocks were trading at would be available on those public uh platforms. Exchanges, well, that's not the case for about half the trading.

That's going on out there and the great thing about the chairman gensler. I really wanted chairman genzler bobblehead, because he's just the best i mean he is looking at this at the reality of what trading is today and saying: the law is out of step, and you know that's the that's the sign of somebody who's, not a lawyer. We have the ability to look into what is going on and we should also add, as a corollary, that 38 percent of trading happens in off exchange, um trading platforms and so away from the public exchanges as well. Could you say definitively that things like naked shorting? Does not go on given that the sec hasn't really looked into the trading activity to date in these dark pools and in the off exchange trading, which is subject to a whole different set of rules, i mean do do we know, because the perception of this new Generation of investor is that the market's rigged and that there are institutions and bigger investors who are committing effectively financial treason off exchange.

So this is the idea of the entire amc stock movement right. So the the data that you just gave right 53 of transactions, take place on the regular everyday exchange that is built for the market right and what doesn't take place is nine percent of dark pools and the other 38 percent in these off exchange platforms. Now the problem with this is the transparency right. This gives the opportunity for any big institutions and, by the way, retail investors can't really do this stuff.

So does that sound like a free market right off the bat right? Not really is this an issue, i think so right and it's a beautiful thing for her to be speaking on. Anyways amc stock is built around the same thesis and hypothesis of hey. Look. This market isn't really built fair.

This gives an opportunity for these big institutions and firms to not be transparent about their holdings, to leave retail investors in a place where they have to speculate, hey, what's going on with the stock right now. Is this actually people selling? Is this short selling? Is this naked short selling? Is this failure to delivers? Why are we not running up? Why are we running down? Why is it? Why is it running upright there's a lot of things that we don't know because of this transparency? That's taking place right, it's it's! A fascinating place to be sitting right now, where, six months ago, these weren't conversations are even being had on national television, let alone cnbc. So that's kind of the the that's taking place that doesn't make sense in terms of almost half of all transactions not taking place on public exchanges, and - and that is the huge issue that i think the the uh current chairman is addressing - that the trading and mean Stocks, the the fact that, uh that we have ready traders, people who are very active and who want to be investing young people who are, are learning a lot and are are passionate about this. But who lack confidence in the regulatory structure and in the system? Um? That is something that you know.

You need confidence in capital markets in order to have a healthy system for raising confidence in capital markets. I had to stop right there i had to because that is so key the so it's key because confidence in the markets right think about this in terms of a stock setup right. So if a stock you're not confident that's going to continue, it's run up. You're worried that the rug might get pulled you're not going to put your money in there worse off.

You might take your money out of there right so to have a lack of confidence in the stock market because of manipulation, fraudulents corruption, naked short selling favor to delivers lack of transparency whatever it may be right, that's a key point. That's what this entire message is behind the the freaking crazy short squeeze, that's taking place with amc and gamestop, primarily my focus amc right now, right, beautiful beautiful point. I like that, you actually double down on that using money for business, so this situation is something that i think he wants to address. My hope is that he's not just looking to or the the enforcement division is not just looking to come down on the reddit traders.

I mean. Obviously, if there's insider trading that was going on. If there is uh, you know market manipulation that that's illegal, then you know that they will find that um. I i think it's a shame that gamestop's stock took a hit um when it disclosed this uh subpoena, because you know this happens all the time.

Uh, the the fcc can be doing an insider trading investigation and it will issue a subpoena to the company that whose stock was traded and the company didn't do anything wrong. So there really isn't any reason for the markets to be reacting so negatively um and for investors to be running for gamestop right. This is not a gamestop problem. It's a you know, trading problem with respect to the naked shorting.

I don't think the problem really is naked. Shorting, i'm gon na stop it here, we'll continue with the naked shorty, but the subpoena right. So so gamestop took a pretty nasty hit. I remember last week it was down like 25 in a single trading day and everybody was super confused.

They were like what the heck is going on. As you know, she just mentioned to right here with that subpoena coming out, it's not a gamestop issue. It's a transaction issue. It's a trading issue, it's it's! Whoever is holding transactions through gamestop, whether it be you know, the retail investors, which we obviously know are not really causing the problem here.

The institutions, insiders the market makers, whoever's making all this sort of stuff click and happen right. So why did the market react so negatively? Why did gamestop take a nosedive with the subpoena i'll? Tell you why lack of transparency a lot of these transactions get filled on dark pool and off exchange exchange off trading exchanges right almost fifty percent nine percent on these dark pools and thirty eight percent on these off. You know exchange trading platforms that can lead to situations like this because they're not transparent, you don't know what people are selling you don't know if the market's reacting poorly. It's simple as this right collusion and manipulation.

My friends, i'm telling you there are a lot of people out there who knew ahead of time. This sort of thing was going to happen and they were able to react in a way in fact, go offensive and play it off as if the market is reacting negatively and then bam. This is all over financial media game stops down amc's down and they paint the exact picture that they want to see. That's the issue.

That's systemic with this whole problem right now, she's about to get the naked short selling and i've got a different opinion that she does, but we're going to listen to what she's got to say. Anyways shorting is a good thing. I mean we have this balance. That goes on, we have people who buy a stock, and you know they want good things to happen, so they want the price to go up, but sometimes the price is too high.

So how do we bring it back down? Shorting is one of the few ways that we can get that price back to reality when it's too high sure - and i don't think anybody so short selling in and of itself - not bad right. I don't partake in short selling, it's not my cup of tea, but that's because of the systemic issue. That's built around short selling right in a perfect world. You go along on a stock.

You buy stock. If you think it's undervalued, you think it's going to go up in a perfect world. You short of stock that you think is overvalued that you think is going to come back down right. This is a big difference.

You short of stock, because you think they are overvalued. You don't short of stock to make it undervalued, you don't short stock to make it go bankrupt. That's the malicious intent behind what short selling represents in the stock market. Now, there's no way that a lot of these small cap companies who have gone bankrupt right were not involved and partly due to short selling and naked short selling, which is where i think the systemic issue is so she's, not wrong in the sense of saying hey.

Nick you know short selling is a good thing, not making sure it's selling, but short selling is a good thing because true, it keeps balance in the market in a perfect world where human emotions and greed don't come into effect. But that's the problem is the way that this is systemically built short selling, isn't isn't feasible, it doesn't make sense to be able to sort of stock beyond the capacity that the limitations of the market are supposed to set. It still happens, anyways right, that's the problem with short selling, so she's, not wrong. She's she's right in the sense that shorting is a good thing.

I wouldn't partake, but i won't partake until the market's built in a way where it can handle short selling and it's not used to bankrupt companies and take money from people right. That's the issue that i'm seeing right now, but he's disputing the role of shorting this market. It's a rule, it's a it's whether or not naked shorting which is illegal has been illegal, since the financial crisis actually exists and whether we know it it exists or doesn't exist when so much is traded off exchange and and there's less transparency to the market. But i want to get back to something that you said that i thought was interesting and that is the sec looking into these reddit traders.

Why would the sec go after in large part, what seems to be retail traders? I mean if you took a look at at what the ceo of amc sent out yesterday in terms of 4.1 million individual investors that own an average of 120 shares of amc. This group of people, this cohort, doesn't seem like they would have their wherewithal to manipulate the markets. Unless you see something that that isn't obvious to me at least well, i think what the sec would be looking into is whether there is some kind of coordinated effort to drive up the price. What's what's interesting here.

Is that um, what you tend to see in a market manipulation is a pump and dump, and you know people take their profits. That's not the case here. So that's the main reason that i think the sec should not be focusing on the traders uh, because they're they're - not some of them of course, are - are getting out and and not taking some profits. But the vast majority are not, and that is not what the the um the overall group was advocating and was doing so um.

I think the real issue here is: do we have systemic problems? Not retail trading problems, not manipulation, um and, and some of it is going on, um undisclosed, um. You know the sec has the right to go in and and look at what citadel is doing and look at what these other big uh market participants are doing. But how much are they doing it? You know, that's something we just don't know right. So there's a couple things in here that i found interesting.

The one of them was: was a pump and dump scheme right? Is there retail trading that's taking place a trading taking place that essentially could be considered collusion and manipulation of the stock market right, and i, my simple answer to with amc and gamestop specifically, is a no right, and this is my my reasoning. Why is because all that i have seen in my last six months is not people telling you to buy and to sell at certain points? That's manipulation right. You cannot do that. It's sharing due diligence, research numbers options chains, you know education, it's all good things that are actually improving and sharpening the blades of the retail investor and the apes out there, so they can make but make better financial responsible decisions.

Second thing was uh, you know pump and dump. So what is a pump and dump really so pump and dump? Is this idea of a stock runs up and a stock immediately dumps back down right it? It kills a lot of people. Some people get stuck. So you have maybe the first person out here who coordinated this pump and dump they say: hey, we should buy the stock, buy the stock buy a stock, it's going to go up, it's going to go up, they stay faxed and then it runs up and then It just dumps back down these people who start these pumping dumps, make their money and then get out of the stock before it actually happens.

You want to see what a pump and dump looks like if you're able to make money on them. That's awesome. That's the whole point of the stock market is to make money, but that's a pump and dump right clove. Did you hear anything about clove before it ran up? I didn't hear - and i tell you what i'm on the internet for five six hours a day on top of my day, job right, i'm on the internet, five or six hours a day, and i hadn't heard one word about clove until the financial media was talking About it and it ran up 70 80 on that single one date right, i didn't heard a lick, a lick of anything.

This is a pump and dump right. It's the exact look of a pump and dump it forms this peak formation right. It runs up it peaks, it runs back down, that's a pump and dump right. Do you see that with amc? No, you really don't.

This is strength. This is not a pump and dump. This is people that actually want to trade amc stock and make money on amc stock and are holding throughout that's not a pump and dump. This is not collusion in my opinion, right and that's that's a beautiful point that she made.

This is not a retail investor problem. This is a systemic and institutional investor problem. It's the 99 versus the one percent, the one percent trying to maintain their wealth and take more money from the 99, and i'm very glad that she's mentioning that. In fact, it makes me sad that the sec would even consider investigating retail investors because they are not the problem right.

The problem is, the system is built for the one percent. Now that the 99, the little guy is starting to speak out about it. They're trying to kick them back down, they don't want to realize. What's going on right, that's the problem, it's not the little guy and if they make you feel like it's a little guy.

It's it's not! The problem is not the little guy, not the least bit. So we'll continue on lisa. Thank you so much for your insights. We do appreciate it um former sec branch head.

I think that is the interesting question that is, you know. Are there systemic issues involved here that the sec needs to look at at least because there is a lot that we don't know and for all the people who are ready to say that naked shorts don't happen? That's definitely. You know one opinion. There's another group of people who believe that it does happen and there's so much off exchange.

Do we know right, that's the issue and it's nothing, we're going to say that's going to change their opinions and that's fine and and i'm sure it does happen. To a certain extent. I've been of the belief that these derivative products that are creating synthetic shorts are highly levered are part of the problem. I'll also say this don't think for a second, and i've mentioned this i'll say it again that hedge funds haven't hired people to infiltrate and watch in some capacity participate in some of these rooms without question.

You want to investigate something, go find those guys and gals, because i think they might be at the root of this problem as well. You know it's funny, it's funny, because i actually mentioned this exact same. You know, hypothesis. That was just mentioned now of infiltration on fox business last week.

It's good to hear him say that, and i do think that happens. 100, so bots shills pretend apes right. The people who try and seep into the community to spread fud, fear, uncertainty and doubt out of scaring you out of your position based on a financially responsible decision. That's not your own right! That 100 happens and that's my greatest concern towards this entire movement of amc.

The legacy and the storybook being written is that people will try and sway you of your opinions to disprove fact through speculation right. These are the sort of things that you got to watch out for and that is market manipulation to a t. People paid to do that, that is, financial treason, it's treason and i've seen it with my own freaking eyes. I've seen the same bots posting the same over and over and over on youtube videos on my twitter comments and they're all faceless names on twitter, faceless names on youtube or their names like freaking, bone ham or something ridiculous.

That makes no sense in the least bit, but this sort of stuff happens right and to say that it's a retail problem makes no sense, and it's it's good honestly, to see to be honest with you a lot of times when i watch cnbc, it seems like A lot of this, this junk of this is fed for the suits, it's meant to say that you're, dumb money, you don't know what you're doing but melissa lee is leading actually a really solid sort of podcasting conversation here regarding the truth behind naked short selling and Some of the problems within the derivatives market and the like right. What's your perspective from the options market point of view, um yeah i'll, tell you what the the volumes are absolutely extraordinary mel and we've talked about that before when we were addressing amc, not to turn amc when, when i had my interview with adam aaron had 11 Of the overall options volume out of the entire market - that's a phenomenal stupid number incredibly long ago and going back to gamestop back in january, and the volumes continue to be there and - and you know, the derivatives markets they're a great tool, but they also, you know There are obviously uh some of the characteristics of it all that cause it to seem like it. It's a different way of trading which it is and it if you know what you're doing then that i think that's very comfortable. For me, my biggest discomfort is that i don't know that a lot of the people that are actually trading in the derivatives markets right now completely understand what their risks are and is i i i don't know how we can fix that, but they've got to get A better understanding of what's really going on and how much risk do they really have on, and i think that's part of the problem because she mentioned investments.

These are not investments. These are trades. These are traders. There is absolutely no doubt in my mind about that.

Even the 100 share folks or the option folks they are trading this and so they're, not looking at this as some sort of a they're, not they're, not seeing the fundamental story, they're, not seeing a lot of the other aspects of it. What they're looking at is the opportunity for that squeeze of those shorts and i'm not saying there's anything wrong with that, but they've got to understand much more about what they're doing and what their risks are and that's my biggest concern right now, as i watch this Continually move to different stocks, each and every day, there's a couple things that i don't know about. So he talks about a couple different concepts. There right he's talking about options which are derivatives, they're, one of the same options, they're a form of derivatives right.

He talks about fundamentals and essentially the fact that people are ignoring fundamentals they're only in this for the short squeeze right also, you know, i think, that's pretty factual, we're obviously not here for fundamental reasons, we're here for the squeeze right as of right now, the long-term Thesis will be here eventually, but not quite yet, but the things that i don't know about is this right. He was stating that people are playing options that don't know anything about options right, and i think the better you know case to be made is true. While there are people who might be playing options that don't know about options, obviously that's not something you should invest in. You should trade, if you don't understand options, he's failing to mention the absolute monstrous liquidity and gains that have been made through the options market right.

That's what's impressive, there's always two sides to the same coin: right. You can look at the one percent, five percent - ten percent negative right, the one five ten percent, who maybe are playing options who lost money because they don't understand what's happening. Or you can look at the 90 95 99 percent who do understand options and who are training them responsibly, limiting their risk and exposure, so they can make life-changing money. I know in the last two weeks there have been people who have made a million plus dollars.

I've gotten messages from over 100 people who have made a million plus dollars on options in the last two weeks. Right. That's the sort of stuff: that's incredible in every sort of situation in every trading environment, you're going to have people who don't make money who make trades because they don't understand and they lose money. That's inevitable.

And i 100 agree that we need to educate people through that process right, but that's not the majority. We can't focus on the minority here instead of the majority right. The majority is this right and that's the whole interview i'll give you my final thoughts on everything. The majority is this: people are making money on nc stock, we're not talking about multiple stocks.

It's not new stock. Every day, like this guy's saying right, it's not in clove blackberry, blah, blah blah blah blah blah. Those are all sympathy plays or pump and dumps right. It's amc and gamestop.

That is what people are watching right now, simple as it is, i'm more bullish on amc than i am gamestop in this current moment in time. I've been talking about it for six months right, but this this idea of people need to be more educated and understand the risks before they invest in this. That's not the message. Man, people understand the risk.

People understand the exposure if you've done any sort of research on this, you know the risks associated with amc stock. That's your own financial responsibility. This is where your financial responsibility comes into play right. You can do you can have a million people, do research and due diligence, but at the end of the day you control your own dollars right.

You have to mitigate your risk and make your own exposure decisions. That's not a feasible excuse to to push a different narrative on what's actually happening here, so i'm super happy actually about the way that melissa lee has gotten about this whole naked shorts yeah slip up on cnbc. I think her, you know, painting this picture and trying to dig into what the sec should do about it, and the systemic issue with the whole problem is a really fascinating piece and in fact i think, she's, one of very few people on cnbc who's been painting. This picture in a pretty solid way and trying to spread good information.

So i think that was a solid interview. Is this something i think i'm going to do on the weekends i'm going to try and dig into a different interview piece they're? Not all going to be this long, most of them are like four or five minutes, but i really like this one. I wanted to talk about it, so if you enjoyed this put it in the comment section down below, let me know i i think i'm gon na do fox business tomorrow. I want to look into something that cd pain, charles payne, has talked about and i'll get that i'll see you when the time comes.

So that's what i've got for everybody. If you enjoyed this, you know the whole spiel drop it like this here subscribe. What do you want to do catch on the next one, my friends, much love and peace?.