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Market Plunge Prevention: Friday Lunch Edition
Rolling buy-ins compliments of our favorite TARP recipients and others are back in full force. If you are short, you are screwed. Get out of the market right now. From a reader:
Yesterday I received an email from ThinkOrSwim Canada stating that my shorted AAP shares would need to be returned by the end of the day because they had been declared as Hard To Borrow. I'm relatively new to investing and have never encountered something like that so I assumed it was a rare, isolated occurrence.
Today, I received this email:
We have received notice from our clearing firm, Penson Financial Services Canada, advising that two of the stocks (CAR and EW) in your account is now hard to borrow. Because this security is not available to borrow, it may need to be bought-in, with a deadline of 3pm central time today, July 17th. If you do not buy the stock, we may be required to do it for you to cover this short position.
So that's three of my short positions getting recalled. I don't know if this is noteworthy or not. Is this normal or is this more market manipulation designed to sustain and prolong the current rally? Is this akin to BAC becoming hard to borrow because the big banks were restricting the ability to borrow them?
Will other readers whose short books are being forcibly bought in please contact me immediately at forcedshortsqueeze@zerohedge.com
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love it
Are you kidding me? Get out now? That's something.
none of those look hard-to-borrow...sounds odd, but Pensons inventory has never been that stable IMO
My broker asked me to return shares. I told him no way. The contract with him gives him no right to force me to return them. And I would sue him and his company if he sold my collateral.
Can someone go into detail what this means? Or what it could mean?
It mean his broker is a bucket shop and they don't want to lose money in this winning bet.
This is what happens when folks believe that they are participating in a market. Trading in any asset class that a TBTF institution can participate in is a waste of time and money.
I guess we should expect some fabricated "news" from CNBC to turbo boost the short squeeze.
The move in the nasdaq sure looks like the beginning of a moon shot. I must agree, cover em.
I clear through GSCO (this site's sworn enemy) and have a large short book. Nothing has been requested to be bought in. Sounds like a PENSON specific problem. I just tested orders in AAP, CAR, and EW and they are not hard to borrow for me. This is particularly interesting because GSCO is notorious for having the worst list of available stocks lately because of their proprietary trading operations.
Brokers raising margin requirements on the ultra short etf's.
Been 50% or $3/sh minimum at the major clearing house forever. Is your broker jacking it further? Or are you 100% concentrated now?
up to 75 on ultra shorts.
Great post. Yeah that's b.s. Just more of the shenanigans and manipulation out there. They have screwed over the small trader or investor that finally many are pissed off and quit playing the game. The stock market really sucks now, that's why I'm trading forex mostly.
I don't know what contract the dude is talking about
But IB can buyin any stock at any time without ANY notice to the trader. If you need an account with IB... you sign away all your "rights" when shorting stock.
The idea that you could sue your broker over a buy-in and win seems like a total noob fantasy.
Must read.
http://articles.moneycentral.msn.com/Investing/SuperModels/mad-world-chi...
Bin Laden will be caught at 2 PM
China will hand the government back all our treasuries at 3PM, don't worry about it.
SPY's will close at 102
Ponzi.
http://articles.moneycentral.msn.com/Investing/SuperModels/mad-world-chi...
I show all three AAP, EW and CAR easy to borrow on the TOS platform in the U.S.
The pension funds have been high jacked by the administration. The administration is coercing hte market up....ANY MEANS NECESSARY. They are telling people...PULL IN YOUR STOCKS
Jim Cramer is openinly advocating this too.
oh yeah
...Fuck Goldman
"Top Three Orwellian Comments Of All Times
* An American major after the destruction of the Vietnamese Village Ben Tre: "It became necessary to destroy the village in order to save it."
* Vice President Joe Biden: "We Have to Go Spend Money to Keep From Going Bankrupt."
* President George W. Bush: "I've abandoned free-market principles to save the free-market system."
This sadly is what has become of our great nation.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com"
I love Mish, but he's drinking too much Libertarian kool-aid these days.
I shorted TLT a while back and Scottrade gave me the same notice so I just complied and covered it for a very slight loss.
Then Scottrade gave me about a 6 notices for the UUP short I had from last fall, complete with a phone call, email, and an overnight fedex (each time -- what a waste of time/resources). I never wanted to sell because I was down and thought it would turnaround. Needless to say, they never followed through with the warning, at 1pm they always said they had enough shares. I ultimately covered it on my own accord by the time the trade rebounded. If I had complied I would have had to take a decent loss.
No warnings since then (I only have one short at the moment)
NAS up almost 1/2% and the decliners are outpacing gainers by 15% as strong as this rally has been looks like participation is lagging.
GOOG down 3% yet they cram up AAPL 3% to cover it.
material stocks report this coming week and GE has sent the longs in hiding. APPL will blow away expectations as always. Hence, now the "green shoots" mantra has passed and what has taken its place is now the "jobless recovery".....what the fuck is that? That's like getting AIDs, dropping dead, and then the doctors saying the AIDs virus is no longer a threat as it has died with the passing of the host. ....All Hail the "Recovery"!!
If you base your trades on the information on this site, you are screwed. I like the site, and have been an avid reader for quite a while, but let's face it. Everything on here is a contrarian indicator. The worse the news posted here, the more positive the momentum. It's pretty impressive. Read the archives with a printout of SPY in hand. You'll see what I mean.
I am sorry "anonymous" can you remind me when the last time I told you to buy or sell a stock was?
You never did. What I mean is that if you take the information, which has a decidedly bearish tint, and base your own trading decisions on it, you will get poorer faster than richer.
So you have it all figured out, then.
Don't tell anyone. We are trying to keep it secret.
The manifesto (upper right hand corner under the banner) is "required" reading.
Read it for what it says as much as what it doesn't say.
the only thing i would say is that i now have serious anger management issues towards wall street.
Tyler: should you have a disclaimer on your site about that? ...about reading of articles will make you hate everyone at CNBC, Cramer, Geithner, Wallstreet, and that annoying guy in the gym that keeps making money by SPYs because he actually BELIEVEs the economy is bottoming when it really isn't and you can prove it....
....
at the rate the government is going, promisory notes are going to turn into free leverage with no value. if you lose this monopoly money today, what does it matter? Going bust in America is the fasionable thing to do. Leverage up!
If you are aware how the market is being played by GS and the rest then you know not to compete against them.
Thank you TD for all the information, it has helped me a lot
AAP, EW and CAR are all currently available to short through Fidelity
Not gonna do it. Still short and holding over the weekend. Getting out on Monday at the open. Damn computer.
i'm still expecting a good week for shorts ahead. Apple's earnings are the only thing that scare me, but i'm not shorting tech. Still don't understand how the Baltic Dry Index & china's announcement of no longer building inventories equates to basic materials going up.. I suppose Big Ben is just going to send the dollar to oblivion faster than demand can slacken.
Steady. Stay on target. Stay on target. The only way you win with these guys is with nerves of steel. Here's my view: you can lie about alot of things, and manipulate a thinly traded market, but I think the measure of where we are will come after a full reading of all of the 2nd Q earnings reports. I say that with the perhaps false confidence that while some of the numbers can be fudged, they cannot all be fudged, and the p/e/ratios, once the dust settles, will not lie. If what I believe is the underlying truth then becomes evident, then you will see volume. Just not the kind anyone wants. On the other hand, if the economy is truly recovering (something I do not personally believe), then I can take my medicine, lose money on my various short positions, and reevaluate from there. But at least there will be an economy for now, and I'll still have a job.
Could be. Put/call ratios dropped like a rock and the ICI laid the "plausibility" groundwork yesterday with their flows data. BTW...thanks for shitcanning the humor in the workplace:
http://news.yahoo.com/s/ap/us_treasury_cartoonist
I had a pretty good short book on my IBDs prop acct for a while, all levered ETFs and periodically rebalanced (to stay kiiind of delta neutral), we just shorted the bull and bear and let them sit... it worked real well for months.
I also had a bunch of shorts for my own acct where instead of buying the bull i'd short the bear and vice versa to get some action on directional plays while capturing the tracking error instead of being fucked by it.
Well, a couple of months ago someone calls us from National Financial telling us that leveraged ETFs were dangerous and we didn't know what we were doing. I told them I knew exactly what I was doing and that's why I was only playing short positions. They treated me like some fucking moron and then the risk dept took OUR ENTIRE FIRM's ability to short leveraged ETFs.
Take from it what you will. My guess is someone that's a "preferred" correspondent got wise and started playing the same strategy, and NFS took away all our shares so they could let someone else borrow them. Or maybe it was their own trading desk.
I was apeshit about it for a while, but I got over it. They've been playing this game with us for a couple of months now. I don't really think it's a conspiracy thing, but rather a function of traders levering up on down cycles and taking profit on up days, eliminating their margin balances and subsequently reducing the pool of shares available to borrow. Since their BSDs probably get dibs on all borrows, all us lowly retails get stuck playing long-only strategies. I mean, if you think about it they can rehyothecate 125% of your debit balance, so repaying $1000 takes $1200 in stock away from the pool of lendable securities, and i don't doubt there's quite a lot of action going on when it comes to journaling assets from type 2 to type 1 to squeeze shorts on limited volume up days.
Yes. Once the bigger players got the stones to short both sides of the leveraged ETFs (with high-Beta underlyings) at the same time, the ability to borrow them basically went away for everyone else. Not completely, but close enough.
synthetics FTW. i miss the short rebate, though.
I don't think this quarter's results will have much psychological impact. The bulls think this is the bottom, so bad earnings will be excused because it's the bottom.
I have a question, though, for anyone here. Has anyone looked to see if S&P stocks with weak volume are up more than stocks with heavy volume? If I were trying to goose the market and had finite resources, I would buy shares in the most thinly-traded stocks in the indexes. Does anyone have any insight into this?
from what i understand, the conspiracy theory is that JPM and GS are just playing the SPYs in force to get the market higher. I keep hearing on bloomberg that traders are buying in force Aug/Sep VIX calls at 40-45......that ain't good.
Remember its OEX week and all kinds of unusual things happen.
Any idea on how this affects reverse ETFS like SDS? I sense a beartrap extraordinaire. If the USG is trying to hose Shorts, all they have done is set up a bigger fall come October-by extending the natural waves-reorienting them to signal algos into buy patterns. Instead of a controlled crash, they are rigging a whopper...