Citadel Securities Has Over $57,500,000,000 In Open Short Positions On Its Books... I Think I Found Out What Happened In January, and Why Trading Was Halted...
reddit: the front page of the internet 2021-05-08
https://sec.report/Document/0001616344-21-000004/
I see you Kenny. I used to think that you were just a bystander in this, and caught up in your friends bad bets; you turned out to be the main villain.
And $57,500,000,000 (billion with a B... that's 57 thousand million for all the non-US apes) is the bare minimum you owe. Why do I know this? Because it's on your annual frickin' report, and you spend 12 months a year cooking those numbers to look as positive as possible to your investors. You don't put your worst numbers in a published report...
What were your short positions from the year before?
https://sec.report/Document/0001146184-20-000006/
$27.5b...
You doubled your position last year, Kenny.
Citadel claims on their own page that they process over 25% of all market trades, and close to 50% of all retail trades.
https://www.citadelsecurities.com/products/equities-and-options/
Our automated equities platform trades approximately 26% of U.S. equities volume across more than 8,900 U.S.-listed securities and trades over 16,000 OTC securities. We execute approximately 47% of all U.S.-listed retail volume, making us the industry’s top wholesale market maker.
In this post: https://old.reddit.com/r/Wallstreetbetsnew/comments/m6xehe/robinhood_the_missing_link/ - I talked about how RobbingYourAss and Citadel are engaging in CFD-like activities; legally floating orders to close at better prices, if you will. I believe Citadel's annual report just solidified that, in my mind.
*Note: Understand, I'm not exactly talking about rehypothecation or naked shorting of any individual company here... I believe he's issuing short shares "legally" under his Market Making abilities... *
Citadel's plan is to route as much of retails orders through its system as possible, and issue a short share for whatever trade is sent to them through a retail platform.
70-90% of retail trades lose money. By issuing a short share on the trade instead of locating a real share to transact, they are simultaneously "providing liquidity", while also betting directly against retail. It used to be a hugely safe bet. It was making money both ways. They collect free money on the share sale, make money by selling off the short positions in a bond (more on this in a second), and make money by the separate entities holding the short positions while Citadel Securities continues to drive the price down.
But then retail won a bet. And not just one bet, but they won multiple bets simultaneously. In late January, multiple stocks spiked at the same time: Gamestop, Nokia, AMC, BlackBerry, etc...
THAT is why Citadel had to shut down trading, and why RobbingYourMum only shut down trading on specific stocks. And THAT is why we just heard in the last congressional hearing directly from the DTCC, that the DTCC did NOT raise margin requirements and cause a halt to any trading.
Citadel, as the market maker for 50% of all retail trades, was short on positions that were processed through RubbingYourCuck... and every single position went up huge at the exact same time. Citadel was caught on the line for every single short position that they created and that was held by RibbedCondom users.
And they still are.
They were providing liquidity to retail the entire time before the squeeze at the pre-squeeze prices.
And yes, I already hear you: "But those short positions could just be their daily market making activity and completely normal in a day-to-day operation."
The truth is: It doesn't matter.
It only matters that those positions existed before the squeeze. The initial run-up happened so fast that there was no time to reverse their positions. The prices went up by multiples in a single day. Any short position they held, they were now locked in to.
And that's assuming that every share purchased during the run-up, also wasn't just short shares going out the door. Citadels page states:
"Our automated equities platform trades approximately 26% of U.S. equities volume across more than 8,900 U.S.-listed securities and trades over 16,000 OTC securities. We execute approximately 47% of all U.S.-listed retail volume, making us the industry’s top wholesale market maker."
Automated.
If they had the automated system programmed to create a short position for a percentage of all retail shares routed to it... THAT explains why trading was completely shut off. The system was just generating short shares the entire time, and Citadel was (and is) the one on the line for all of it. THAT is also why they allowed selling and not buying. It allowed them to try and purchase back their shares at the same prices they shorted them at, with no buying interference.
Know what the best part of all this is?
That $57,500,000,000 was what they had on the books as of 12/20/20... it doesn't even count what happened in January.
Kenny, my man... Exactly how deep are you right now?...
If Citadel executes 50% of all retail trades, and there were 800,000,000 trades on GME alone between Jan 21 and Jan 29 (https://finance.yahoo.com/quote/GME/history?p=GME)... how many of those 400,000,000 shares did you short to provide liquidity, Kenny? How many did you cover?...
How many are still owed after exercising all of your options for the last 4 months?
Is that why Citadels corporate bonds were rated BBB-? The absolute lowest rating you can get for investment grade bonds? Is it because your updated liabilities page looks like a raging dumpster fire?
That is why Citadel keeps being called out by name in the congressional hearings and being asked if they should be allowed to fail. Because I now firmly believe that Citadel is the ultimate bagholder of all of this.
Remember, not only did Citadel bail out Melvin to avoid the margin call dominoes from falling, Citadel Advisors also personally lost over 3% of their worth in January alone (what was reported): https://markets.businessinsider.com/news/stocks/here-are-the-hedge-fund-winners-and-losers-amid-januarys-gamestop-mania-2021-2-1030034341
Citadel Advisors showed $234bil in AUM in 05/01/20: https://aum13f.com/firm/citadel-advisors-llc
(Remember, Citadel Advisors is separate from Citadel Securities)
If they lost 3%, that's $7,000,000,000 in losses in January alone, not counting the Cohen bailout.
So how do I think Citadel Advisors and Melvin Capital wound-up holding short positions created by Citadel Securities if there is supposed to be a firewall between the two of them? By re-packaging the short positions and selling themselves collateralized trust bonds. Crazy Melon (u/sydneyfriendlycub) has a very well-written group of posts about it here: https://old.reddit.com/r/GME/comments/n2hjnk/33_the_ultimate_dd_guide_to_the_moon_crazy_melon/
Citadel Securities would sell short positions to facilitate liquidity on retail trades, and simultaneously bet against retail. Citadel Securities would package those short positions in Collateralized Trust Bonds, and sell those bonds to Citadel Advisors and Melvin Capital.
That would get the short positions off of Citadel Securities books, effectively "covering" them, and allow them to show FINRA a lower short position holding. They then use their Market Maker status to continue issuing shorts on a stock like GME, causing the price to fall, and the short positions of Melvin and Citadel Advisors to go up in value. It was an infinite money glitch, until retail won a trade.
Want proof of more insider fuckery?
Explain to me how Melvin just filed an amended report, showing that he magically found a holding position of $121,500,000 worth of PUT options of VIACOM from December, right after the Archegos liquidation happened?
https://www.sec.gov/Archives/edgar/data/1628110/000090571821000618/xslForm13F_X01/infotable.xml
I'm sure that the SEC finds that reporting those puts 4 months after the due date is completely normal... considering the circumstances.
Sorry to cut this off abruptly, but I'm tired and the screen is going hazy. Time for ape to sleep. If I tie anything else together, I'll be sure to break the tin-foil hat back out later.
If I got anything wrong that you think needs attention, lemme know so I can edit it. I like my conspiracy theory, but it doesn't mean its 100% correct.
TL;DR:
Heg r fuk