The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools

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| Author       | Source       | 
| :-------------: |:-------------:|
|  [u/plants69](https://www.reddit.com/user/plants69/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/mx25li/the_most_manipulated_stock_a_gme_comprehensive_dd/) | 

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[DD 👨‍🔬](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22DD%20%F0%9F%91%A8%E2%80%8D%F0%9F%94%AC%22&restrict_sr=1)

It's not at all new information that GME is being f*cked with in about every single way imaginable. This is a comprehensive DD that combs through key data and looks at Citadel's prior infractions in order to make connections with how Shitadel and friends have been influencing $GME price action.

This DD is meant to be as approachable as possible to be friendly toward our new apes and those without many wrinkles.

Some disclaimers before we begin:

-   I am not a financial advisor and this is not investment advice.

-   To the best of my knowledge the information in this post is accurate, but I am more than capable of making mistakes so feel free to correct me if there are errors & I am happy to edit this post.

GME: The Most Manipulated Stock

Contents:

1\.  OTC data

2\.  Wash Sales

3\.  ATS data/dark pools

4\.  Married Puts

5\.  FTDs. Seriously where the fuck are these shares???

Controlling the price: OTC Volume on GME

-   OTC or "Over the counter" trading is a type of trade between two parties without the supervision of an exchange. It should really be called "behind the black curtain" trading to be more accurate to its name.

-   GME OTC volume as % of float in February 2021 was 234x higher than the average volume as % float for Dow 30 stocks. GME Traded at 655% of the float via OTC. Meanwhile average OTC trading volume for Dow 30 in Feb was roughly 2.8% as a percentage of float.

    -   <https://www.reddit.com/r/Superstonk/comments/mw2p3j/analysis_gme_percentage_of_float_trading_on_otc/>

-   A public stock exchange has the benefit of facilitating liquidity, providing transparency, and maintaining the current market price. In an OTC trade, the price is not necessarily publicly disclosed. Why does this matter? When the price is not publicly disclosed, OTC can be a way to route buy orders to suppress them from affecting the price of the security.

-   OTCs, like dark pools, are designed to limit transparency and prevent the transfer of shares from affecting the price listed on public exchanges. It is easy for a market maker like Citadel to route retail buy orders through the OTC because they use PFOF (payment for order flow) with a large number of retail brokers (ie Citadel paying Robinhood etc to route orders where they want orders to go and give investors unfair prices. They make a lot of money from this.) More info on PFOF and how it's been fucking over retail investors for years:

    -   <https://bsic.it/how-payment-for-order-flow-is-impacting-markets-the-robinhood-and-citadel-case/>

January OTC Data

[![r/Superstonk - The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools](https://preview.redd.it/hgwtn2gfvyu61.png?width=2260&format=png&auto=webp&s=5800c80722c5df9333ea6d21bb6fb6f5610af605)](https://preview.redd.it/hgwtn2gfvyu61.png?width=2260&format=png&auto=webp&s=5800c80722c5df9333ea6d21bb6fb6f5610af605)

The total shares volume for GME was 525,247,645 in OTC January data.

-   Citadel traded around 250 million shares in about 2.5 million trades, meaning each trade had about an average of 100 shares. This low volume per trade signals that Citadel is likely using OTC trades to route small retail orders and the recently published February data is even more damning.

February OTC Data

[![r/Superstonk - The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools](https://preview.redd.it/8x362sjhvyu61.png?width=2276&format=png&auto=webp&s=ddeb05cb689599834bb56081628ddea520a68d5a)](https://preview.redd.it/8x362sjhvyu61.png?width=2276&format=png&auto=webp&s=ddeb05cb689599834bb56081628ddea520a68d5a)

The average of Citadel volume per trade shrunk to 115mil/2.6mil per trade or roughly 44 shares per average trade of GME OTC.

-   How can monthly trading volume on the OTC be this high if the float of GME is so much smaller? Where is this liquidity coming from?

-   Let's have a look at Robinhood's GME OTC data from February once we scroll down this list.

[![r/Superstonk - The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools](https://preview.redd.it/dplj2c3kvyu61.png?width=2260&format=png&auto=webp&s=6e66ea03aa942e5b39d94ea6b2a8fe09c6d8af99)](https://preview.redd.it/dplj2c3kvyu61.png?width=2260&format=png&auto=webp&s=6e66ea03aa942e5b39d94ea6b2a8fe09c6d8af99)

In February 2021, Robinhood Securities LLC exchanged 774,632 shares over the OTC in about 772,023 trades. Let that sink in.

-   THE AVERAGE SHARES PER GME OTC TRADE UNDER ROBINHOOD WAS ONE SHARE!! YOU REALLY CAN'T MAKE THIS UP!!!

-   This is significant because Robinhood is a retail broker & retail investors have been overwhelmingly buying shares through its platform (Not anymore I hope. GTFO of Robinhood). Low volume per trade signifies that Robinhood is routing even its smallest orders through OTC & dark pools in order to suppress $GME price.

-   Citadel is bleeding money to route orders through the OTC, just so that our orders don't launch the share price:

1\.  "In an OTC market, dealers act as market-makers by quoting prices at which they will buy and sell a security, currency, or other financial products. A trade can be executed between two participants in an OTC market without others being aware of the price at which the transaction was completed."

2\.  "In general, OTC markets are typically less transparent than exchanges and are also subject to fewer regulations. Because of this, liquidity in the OTC market may come at a premium."

See for yourself the OTC data if you want:

<https://otctransparency.finra.org/otctransparency/Agreement>

Click OTC (Non-ATS) Issue Data

View -> Monthly

Issue -> type in GME

Report -> NMS

Date, see January or February of 2021 or new months if available

Wash Sales

-   "On January 9, 2014, the New York Stock Exchange charged Citadel Securities LLC with engaging in wash sales 502,243 times using its computer algorithms. A wash sale occurs when the buyer and the seller are the same entity and there is no change in beneficial ownership. Wash sales are illegal because they can manipulate stock prices up or down. Citadel paid a paltry $115,000 fine for half a million violations."

-   'The New York Stock Exchange also said Citadel "erroneously sold short, on a proprietary basis, 2.75 million shares of an entity causing the share price of the entity to fall by 77 percent during an eleven minute period." In another instance, according to the NYSE, Citadel's trading resulted in "an immediate increase in the price of the security of 132 percent."'

    -   🤪don't you hate it when you accidentally short a stock and it falls by 77% percent in 11 minutes

    -   I wonder if they "erroneously" did the same thing when GME fell from $340 to $170 in about 20 minutes. hmmmm. happens to the best of us, I suppose.

-   Isn't it cute how these SEC fines are so cheap we can document a lot of Citadel's bullshit? I don't have time to include it all in this post but here's some nice reading if you haven't already read it "Citadel Has no Clothes"

    -   <https://www.reddit.com/r/GME/comments/m4c0p4/citadel_has_no_clothes/>

ATS Data / Dark Pools

-   "A dark pool is a privately organized financial forum or exchange for trading securities. Dark pools allow institutional investors to trade without exposure until after the trade has been executed and reported. Dark pools are a type of alternative trading system (ATS) that give certain investors the opportunity to place large orders and make trades without publicly revealing their intentions during the search for a buyer or seller."

-   Dark pools are meant for certain investors to place LARGE ORDERS with almost no transparency.

[![r/Superstonk - The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools](https://preview.redd.it/l18eixfyvyu61.jpg?width=489&format=pjpg&auto=webp&s=64bd2e93edb7bac4269502083174e7249d1f75c5)](https://preview.redd.it/l18eixfyvyu61.jpg?width=489&format=pjpg&auto=webp&s=64bd2e93edb7bac4269502083174e7249d1f75c5)

Source: WS on Parade

-   "During the week of that big spike in share price, the week of January 25, two of the biggest names on Wall Street used their Dark Pools to trade big amounts of GameStop shares. UBS's Dark Pool ranked number one in both share volume and the number of trades. It traded 10.66 million shares of GameStop in a total of 217,118 trades. One of JPMorgan Chase's Dark Pools, JPM-X (the SEC allows it to have two Dark Pools) ranked number two for the week with 5.15 million shares of GameStop traded in a total of 30,835 trades."

-   "But here's what doesn't make sense about those numbers. Both UBS and JPMorgan Chase focus on institutional and high net worth clients. If you divide the January 25 weekly share volume for UBS by the number of trades, it works out to an average trade size of approximately 49 shares -- an odd lot. If you do the same for JPMorgan's Dark Pool, it works out to an average trade of 167 shares."

Institutions will typically place orders between 1,000 and 10,000 shares through OTC and dark pools. Why are these averages so low?

Chart: Weekly Average GME Shares per Trade via ATS/Dark Pools

[![r/Superstonk - The Most Manipulated Stock - A GME comprehensive DD about OTC data, wash sales, married puts, FTDs & dark pools](https://preview.redd.it/uasaz1f4wyu61.png?width=750&format=png&auto=webp&s=a96579d89832d06ca2c75fea62029cc5dd8e1231)](https://preview.redd.it/uasaz1f4wyu61.png?width=750&format=png&auto=webp&s=a96579d89832d06ca2c75fea62029cc5dd8e1231)

Source: Finra's public ATS data on GME.

-   Notice how the average of shares per trade decreases after GME's big spike and stays low.

-   Some Dark Pools work as intended. For example: in week 2/1/21 Blackrock's dark pool traded 189,312 shares of GME in 19 trades for an average of 9,963 shares per trade. In this same week BIDS traded 99800 shares over 196 trades for an average of 509 shares of GME per trade.

-   Others are routing smaller orders through these notable exchanges (2/1/21 week data):

    -   CROS routed a volume of 836,259 shares in 40,733 trades for an average of 21 shares GME per trade

    -   DBA-X routed 1,043,761 shares in 23,353 trades for an average of 45 shares GME per trade

    -   EBXL routed 1,213,755 shares in 15526 trades for an average of 78 shares per trade

    -   IAT-S routed 4,900,530 shares in 90616 trades for an average of 54 shares per trade

    -   JPM-X routed 819,664 shares in 11308 trades for an average of 72 shares per trade

    -   KCGM routed 1,058,700 shares in 25,052 trades for an average of 42 shares per trade

    -   SGMT routed 1,089,268 shares in 20,196 trades for an average of 54 shares per trade

    -   UBS-A routed 4,290,944 shares in 144,285 trades for an average of 30 shares per trade

Taking the total number of shares traded divided by number of trades over ATS for week 2/1/21 we get 17,913,654 shares over 392,399 trades for an average of 46 GME shares per trade. Keep in mind, this data only pertains to ONE week of trading in 2/1/21, right after our January spike when GME price entered free fall mode.

So... who operates all of these dark pools. Let's see who we're fighting with here:

-   CROS or Crossfinder is operated by Credit Suisse

-   DBA-X: Deutsche bank

-   EBXL: jointly owned by Credit Suisse, Wells Fargo, Citigroup, Merrill Lynch (part of BOFA)

-   IAT-S: Interactive Brokers

-   JPM-X: JP Morgan Chase & Co

-   KCGM: Virtu Americas

-   SGMT: Also called "Sigma-2" by Goldman Sachs

-   UBS-A: UBS Group

None of these institutions are sus at all! /s. For me, it was important to make this list to see exactly who is working against us in order to understand who is potentially at stake/ being paid off here. A number of these institutions are known for working with high net worth clients who are not making single or double digit transactions that would drive down a trading average to these low levels.

Married Puts

-   What is a Married Put? A married put is the name given to an options trading strategy where an investor, holding a long position in a stock, purchases an at-the-money put option on the same stock to protect against depreciation in the stock's price. Sounds pretty innocuous, but the problem comes in with Bona-Fide Market Making privileges, outlined in this published paper.

    -   <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1675234>

-   The paper above is some GREAT reading. A few highlights:

    -   "Equity options market makers currently enjoy an exception from SEC Regulation SHO, which requires short sellers to borrow or locate stock. This exception exists so that options market makers can hedge positions and maintain liquidity. When the market making is bona fide, naked short selling is permitted. Options market makers, however, still must locate and deliver shares within 13 days in securities that have significant failures to deliver (FTDs), also called threshold securities.

    -   "In a married put, a short seller purchases put options from an options market maker who then [naked] shorts the same amount of stock back to the short seller as a hedge. If the stock sold is not a threshold security, then the options market maker may fail and never deliver."

-   So a hedge fund can buy put options from a market maker. The market maker wants to hedge their potential losses from making the trade. Instead of locating shares to borrow and short, a market maker can short shares that don't exist. Here's the catch: they have 13 days to locate and deliver the securities. Certainly this system of FTDs can't easily be abused! Right...

-   Let's look a similar stock that squeezed in 2020 as an example:

    -   "[O***stock] is one of many public companies with significant FTDs. The SEC, pursuant to a Freedom of Information Act request, disclosed that in Q2 2006 there were 3.8mm [stock] FTDs. At the time, [stock] had issued 20.51mm shares, of which only 10.85mm "floated" in the market. Thus, one third of the float had failed to deliver. There is strong evidence that married puts, executed in part on the Chicago Stock Exchange, are one major source of delivery failures in [stock].

    -   How did [stock] fight back at the shorts? By issuing a crypto dividend. See my other comprehensive DD if you want more info about how a crypto dividend could benefit GME similarly.

        -   <https://www.reddit.com/r/Superstonk/comments/mt62vm/the_big_picture_dd_a_comprehensive_dd_suitable/>

-   Married puts in [stock] executed, in part, on the Chicago Stock Exchange indicate several layers of fraudulent, manipulative and criminal activity:

1\.  Engaging in securities fraud by knowingly failing to deliver securities

2\.  Mis-marking intentionally short sales as long.

3\.  Engaging in market making activity that is not bona fide.

4\.  Failing to comply with Regulation SHO close-out requirements ("rolling the fails")

5\.  Agreeing in advance not to demand delivery through buy-ins (i.e., criminal collusion).

-   Another micro-cap company explains how bona-fide market makers hurt their company by abusing these practices.

    -   <https://www.globenewswire.com/news-release/2018/06/14/1524626/0/en/Explains-Illegal-Naked-Shorting-Being-Perpetrated-By-Major-Market-Makers-on-MAXD-Shares.html>

FTDs... where are the shares?

What is an FTD? "FTDs are, in effect, phantom shares that circulate in the stock market as real shares; just as counterfeit currency destroys the value of a currency, phantom shares deflate the price of a company's shares."

Now we know that Shitadel can naked short whenever they want, and they follow market maker grace periods such as the T+13 to close out on their married puts. But how do these organizations continue to reset FTDs to avoid delivering what they owe?

-   A lot of the time, Shitadel and others just let some shares fail.

    -   <https://wherearetheshares.com/>

The Welborn article describes the case for [stock], but the implications remain the same for GME FTDs:

-   Note that the 3.8mm delivery failures do not include FTDs that occurred prior to netting in the Depository Trust Clearing Corporation's (DTCC) Continuous Net Settlement (CNS) system, nor does it include FTDs in ex-clearing. The DTCC claims that its CNS system handles 96% of settlements, and that "the Stock Borrow Program is able to resolve about $1.1 billion of the 'fails to receive,' or about 20% of the total fail obligation" every day. Thus, if official fails in [stock] reached 3.8mm, it is possible that total fails reached 20mm or more.

-   So.... it's possible the FTD data we're seeing is ONLY 20% of what is actually failing to deliver. Where are the rest of the shares?

-   Check out this recent post:

    -   <https://www.reddit.com/r/Superstonk/comments/mvdgf5/the_naked_shorting_scam_in_numbers_ai_detection/>

    -   Disclaimer: Some of this post is speculative, but I still think the data presented is really interesting and definitely worth a read if you haven't seen it yet.

    -   TLDR: OP built an AI that detected 140 million FTDs via Deep ITM calls, married puts, and other dark pool trading data.

    -   Deep ITM calls were purchased and immediately exercised in order to "deliver" counterfeit shares to reset the FTD cycle. Another excellent post that dissects this:

        -   <https://www.reddit.com/r/GME/comments/mhv22h/the_si_is_fake_i_found_44000000_million_shorts/>

Do the SEC & DTCC know that missing FTDs can be obscured?

Yes, yes they do. They've known for decades. Deep ITM call options are being purchased less and less often now (as far as we can tell) from new DTCC rules and hopefully SEC chairman Gary Gensler will begin to crack down on these fuckers too. One reason why we are actually seeing a lot of action is because these guys KNOW that hedge funds and market makers fucked up big time, and they're preemptively cleaning up the huge financial mess looming around the corner.

TLDR: Bad stuff has been happening to our favorite stock, but things are turning around, and as always, keep buying and HODLing. 💎
