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Pulling All Stops To Force A Melt Up: SPY Hard To Borrow Again
It seems like it was just a year ago when we noted the first instance of SPY becoming hard to borrow. Well, it was. To wit, from April 22, 2009:
Developing story: Traders
confirm several locations indicating SPDRs are no longer automatic
borrow and have made their way to the Hard To Borrow list: pre-borrow
call is needed versus automatic short prior, as not enough underlying inventory.Have fun hedging the market when you can not short. Wholesale market squeeze is being orchestrated.
We just obtained confirmation that anyone who clears through Merrill Prime is getting a Hard To Borrow notification for the SPY once again. And so State Street and the BoNY guys come out guns blazing once again, to make sure it is impossible to short the market on today's Fed day. What is it with the market and HTB lists in April? At least market neutral funds are having a field day as they are forced to unwind in droves.
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CATS: All your short are belong to us.
Mechanic: Somebody set up us the squeeze.
CATS: You have no chance to short make your time.
ETF shares are not automatically created (or destoryed). They need an "Authorized Participant" to hand the underlying basket to State Street for them to create a new basket of 50K SPY, or to hand 50K share of SPY to State Street in return for the underlying assets.
I don't know what the guys over at ML have going on, but I've had no problems with SPY borrows today.
It only happens if there is a good arbitrage with the underlying assets.
Even if SPY were hard to borrow (and it may have been today at ML, but that I think was the exception not the rule), it was still trading in line with its fair value throughout the day.
Unless you could deliver the 500 underlying assets (and a bit of cash) to State St for a price below the cost of 50K SPY (including transaction costs associated with those purchases), there's no reason the expect new units to be created.
bend and extend......k-y for all.
how many days until dow 36,000?
At the federally mandated daily appreciation rate of .5%, it will be around 240 trading days, so sometime next March.
I don't know guys. As of now, the Dow is down -4.16 pts. At least the S&P is up 1.96 pts.
But still, I didn't think a down market could happen.
I'm frightened.
Hold me....
don't worry bro, the day isn't over yet.
I am convinced that the market will not go down by that much as bearish as i am. There are no sellers left, all the average guys like my dad and millions others who are buy and hold dont sell, and any real sellers would not have bought the market. So the only holders left of stock are the buy and hold til you die, and we know they ain't selling, and then the banks, and we know they aint selling. Something Big would have to happen for this market to go down by more than 10%.
well there's no shortage of really big possibilities, that's for sure.
however, i am resigned to the fact that we are back in 2007, or worse 2003, and that the government will allow fraudulent accounting to continue, and China will keep pumping, and the stock market will continue to rise.
i have given up (capitulated) on truth and integrity in America.
Its probably just because everybody likes them so much, nobody even wants to lend them.
hmm....those fluffy white clouds on the horizon gives me a bad feelin. i smell orchestrated market collapse a comin. i smell it on the wind.
Well considering the logic of the algorithmic system which does most of the daily trade volume something needs to happen in the 10-20 most heavily traded stocks for the market to behave like it did in '87. That, or FED just pulls out half a trillion to quarter trillion of funds in matter of minutes like it did in '08 and you have a -2000 pts week, if not more. Also you can have a play-by-play repeat of '08 and '87 if the FED does what it did [which it surely will] and the algos just crash the bitch down.
Maybe its true, they are just punting 1000 shs of SPYs nonstop everyday between the major prime brokers...
No shares available to short? Call me crazy but could it be that WS finally is holding enough short to crash the market? Profiting from up and down markets.
This was my take and I was reading before posting to see if somebody beat me to it. These shares will be available to the big houses when the signal is given to go short.
Fed says: Members noted the importance of continued close monitoring of financial markets and institutions--including asset prices, levels of leverage, and underwriting standards--to help identify significant financial imbalances at an early stage. At the time of the meeting the information collected in this process, including that by supervisory staff, had not revealed emerging misalignments in financial markets or widespread instances of excessive risk-taking.
These guys are a room full of idiots. There are the worst economist of all time........
Or else they are the biggest liars of all time.
well, with the US Taxpayer borrowing from the Chicoms to backstop any losses incurred...there is no risk to begin with
nothing wrong here move on---- risk taking is gone.....
.... WTF...
Manipulation was made legal with executive order in March of 2009. They operate with impunity without any fear of retribution, indictment nor a fine.
JM... couldn't find anything done in Feb, Mar, or Apr that does what you say.
What was the Order Number, and what did the order change?
Please... thank you!
Sell
And have the Spanish SS up my ass? No thank you.
They want S&P 1200+ they'll make it happen. You see it everytime there's a techincal barrier the past year.
Why the fuck would you hedge with SPY?
1 SP mini has the same power as 500 SPY.
SPY = 119.01 at the close of Apr 6th.
500 * 119.01 = $59,505
Say 10:1 margin, that's still 5,950.5
Even for retail traders, margin for 1 ES is around $500-$600.. 10 times more capital efficient.
Market is going up simply because no one is selling. It's that simple.
Not sure what broker you are using but 1 E-mini on ThinkOrSwim is $5600 worth of margin. Unless you're talking about buying an option on the future? And isn't the margin limit on equities 4:1 at most?
Always nice to see another TOS monkey.
Is there a better broker for retail folks?
http://www.mirusfutures.com/futurestrading_resources_margins.htm
TOS is a fucking dog slow piece of shit, you shouldn't trade with it. If lagging quotes are your idea of fun, then by all means.
TOS's option analizer is decent though I have to admit. Except it in some cases it computed theta incorrectly and it doesn't weight vega in a portfolio mode (not all vegas are created equally) like it does for delta/gamma.
http://www.mirusfutures.com/futurestrading_resources_margins.htm
TOS is a fucking dog slow piece of shit, you shouldn't trade with it. If lagging quotes are your idea of fun, then by all means.
Thanks, been looking for a good one.
Because not everyone's a baller. Some of us, just mini-ballers. Last March i could only afford 1 share of SPY, and ill be holding it until it appreciates to the price of 1 GOOG, which i will then keep till it reaches BRK.A prices:)
Market is going up simply because no one is selling. It's that simple.
I cant understand that, it would seem reasonable to assume that for a market to exist there has to be someone selling, if no one is selling there are no buyers. One cannot exist without the other. I understand the pig farmers theory but that only works on very-very low volume. Is it just the pig farmers and the day traders out their running this market up??
I clear with Merrill- SPY was shortable today. The interesting fact is that the smalls in the form of IWM are on the "threshold security" list, i.e. never shortable without a locate. The perpetual gunning higher of small caps which can't borrow money continues....
I heard DR hike coming Thursday, again. Got to get some action going here. What the frek is this BS?
I have some beachfront property in Kansas that I'd like to sell you...
Yeah, and there's a snowball in hell for sale or collateral for that beach property.
Ok, so assuming ML is your guy and you wanted to short SPY into the close...
If you didnt, good for you, youre up!
No problem here.
yes that would explain this:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aT.QUD5kdxQc
No problem here...
http://www.youtube.com/watch?v=F7KMMxAQp8I
The kids always get a kick out of the leviathan of the deep otherwise known as "Bubbles".
hi.. in 2007, i got a notice from tdameritrade about my SPY short position margin call crap and ask me to cover or add fund. i decided to ignore it. within a week the market crashed.
It's a bubble. Buy the next pull back: SSO, QLD, etc.
Virtually never watch TV anylonger, yet was watching PBS 6:30 1/2-hours business news and the had one guy on there who said to buy SPY while later in the show another guy made it sound like gold was a bad investment.
Just goes to show you, even PBS is on board talking the Fed/Gov game plan book to keep folks' money within the scam and away from things of real value.
Nightly Business Report right.... his name escapes me but that old fat man is anything but a good host.
Yes, though to be fair the recommendation about SPY was from one of their 'educated' guests, as was another 'educated' guests about gold. It now makes even more sense why i DO NOT watch TV for news and information.
And let us not even bother wasting time discussing the highly corrupt CNBC/NBC/ABC/CBS, why waste time on that drivel?
The SPY is irrelevant; anyone out there who is willing and able to short size in SPY can do the same with S&P futures. All the retail accounts out there looking to short a couple 100 shares have almost no effect on the market.
The best part of the meltup is how Douchinger is now locking TF almost every week. Got to be frustrating to be a deflationist short and doing all this TA jibber jabber and especially hating gold. One of his "gold star" peeps is an acquaintance of mine; waiting for a 9 handle on gold...yeah, good luck with that.
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