From: https://www.reddit.com/r/Superstonk/comments/tsckh5/what_we_saw_yesterday_gave_us_a_peek_behind_the/
From: https://www.reddit.com/r/Superstonk/comments/tsdbut/what_happened_yesterday/
Hello beautiful apeys!!!! I was brainstorming with some wrinkled apes in a chat and we came to an astounding conclusion.
TL;DR on that is that every DRS’d share shifts liability to the broker for x amount of synthetic shares (However many actual synthetics there are. For all we know there could be 20 or 50 synthetics for every 1 real share.)
By shifting liability to the broker, that forced the system to look for shares. Liquidity was so dry yesterday that the only shares available for purchase were the limit orders at CS for over $200K.
That got me thinking… Why? It didn’t make any sense to me considering they have an unlimited synthetic printing machine. How in the world did the liquidity ever get that dry to begin with? Then it clicked.
Why the fuck are they routing 90% of orders through dark pools? Because they control the rules in the dark pool. They can create as many fake shares as they want there.
According to Investopedia:
Dark pools are a type of alternative trading system (ATS) that gives certain investors the opportunity to place large orders and make trades without publicly revealing their intentions during the search for a buyer or seller.
Retail buying pressure through brokers have 0 effect on price. Because retail orders are being routed through the dark pool synthetic process.
Exercising options have 0 effect on price because they’re internalizing the order and giving you a synthetic.
But CS buys are different.
Every time you buy a share on ComputerShare, you’re sending the order officially to the real live legit lit market. And that’s when supply and demand comes in and affects the price.
CS buys come in batches.
Retail broker buys don’t count, they all go to the dark pool.
There’s plenty of liquidity in the dark pool since they make their own rules.
That’s why you can buy a share on WeBull or Robinhood or Fidelity or w/e…
They didn’t halt trading for brokers, for retail’s sake… They didn’t run out of liquidity for retail brokerage orders, because they all are routed to the dark pools.
They halted the TICKER because on the lit exchange there was 0 liquidity at the $200 range. No one was selling.
If the CS buys went through they would have bought FRACTIONAL SHARES at $220k.
Because CS buys based on dollar amount rather than how many shares you want..
People would have seen 0.000001 fractional shares in their accounts and it would have been on record that GME was purchased for $220k. They couldn’t have that.
This sparked another thought..
Brace yourselves for this because it could be the one bit of logic that triggers another wave of DRS FOMO..
If every DRS share shifts x amount of liability to the broker.. When the float gets 100% DRS’d, that means brokers are going to be on the hook for those shares when you try to sell 1 share for hundreds of millions of dollars.
Because each synthetic they have is linked to a real share. Which they don’t have. Because they’re all on CS.
Yes, SHF have to buy back billions of shares. They have a contract to buy them. But you can’t close a position with a synthetic IOU. Only a real share. If every share was DRS’d, they wouldn’t be able to buy the shares from brokers. They’d have to buy them from CS.
As evidenced by the only shares being available yesterday being the ones with limit orders from CS.
Think about it… Yesterday we saw a peek behind the curtain.
People want actual legit proof that DRS does something? Look at yesterday. Period.
We saw what happens when real liquidity dries up on the lit exchange and synthetic share liability get’s transferred to the broker due to DRS. They had to STOP the whole ticker and create new synthetics. Not for retail but for the brokers..
So long as there are actual shares NOT DRS’d, they can create unlimited synthetics based on those real shares. But the second ALL shares are DRS’d, they can’t create any synthetics based on them.
That’s when liquidity actually dries up and new CS buys will come from CS limit orders and you’ll only be getting 0.0000001 fractionals. And the price on the ticker will be astronomical because fractional shares got bought starting at over $200k.
And that’s when brokers turn off the buy AND sell button because they can’t compete with those prices because they don’t own real shares. Brokers are just doing CFD (which is why they try so hard to convince you not to DRS when you talk to them on the phone) and this will expose it all.
Brokers may either go bankrupt and broker apes would have to deal with SIPC to get their tendies, OR they pull an LME situation and roll back trades. They’re going to pull some fuckery, we saw the beginning of it yesterday. Who knows what fuckery they actually have planned.
This is just my dumbass opinion, but the only way to guarantee your tendies is to DRS at this point.
Because remember, they can’t close with synthetics. Logically the only apes getting the phone number payout are the DRS’d apes.
Just based on what we saw yesterday. When MOASS kicks off, it’s looking directly at CS limit orders.
Nothing else satisfies the beast.
TL;DR: DRS your shit. Not financial advice.
Edit 2: Lightbulb moment..
Reason the 420.69 orders didn’t go through were because those are synthetics. The orders needing to be filled were CS orders.
CS orders must not accept synthetic shares.
CS was looking for real shares with a serial number. It was going to buy the $200k+ and deliver fractionals.
They didn’t flood the market with synthetics during the halt. They had to locate real shares.
Enter BlackRock.
I think BlackRock had to sell real shares to fill the CS orders so that the price didn’t skyrocket.
That’s why the borrow fee went down, and that’s why there were so many new shares to short/borrow.