From dec0459465136b8869f9c15317a1710151f172ed Mon Sep 17 00:00:00 2001 From: verymeticulous Date: Sun, 6 Jun 2021 09:05:45 -0400 Subject: [PATCH] Create 2021-04-21-No-Deep-ITM-Call-Blocks-Purchased-Today.md --- ...No-Deep-ITM-Call-Blocks-Purchased-Today.md | 44 +++++++++++++++++++ 1 file changed, 44 insertions(+) create mode 100644 DD/Deep-ITM-Call-Analysis-by-Dan-Bren/2021-04-21-No-Deep-ITM-Call-Blocks-Purchased-Today.md diff --git a/DD/Deep-ITM-Call-Analysis-by-Dan-Bren/2021-04-21-No-Deep-ITM-Call-Blocks-Purchased-Today.md b/DD/Deep-ITM-Call-Analysis-by-Dan-Bren/2021-04-21-No-Deep-ITM-Call-Blocks-Purchased-Today.md new file mode 100644 index 0000000..8208ea1 --- /dev/null +++ b/DD/Deep-ITM-Call-Analysis-by-Dan-Bren/2021-04-21-No-Deep-ITM-Call-Blocks-Purchased-Today.md @@ -0,0 +1,44 @@ +NO DEEP ITM CALL BLOCKS PURCHASED TODAY (4/21) + +============================================== + +| Author | Source | +| :-------------: |:-------------:| +| [u/Dan_Bren](https://www.reddit.com/user/Dan_Bren/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/mvv0t9/no_deep_itm_call_blocks_purchased_today_421/) | + +--- + + +[Discussion 🦍](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22Discussion%20%F0%9F%A6%8D%22&restrict_sr=1) + +What up Apes, + +[u/Dan_Bren](https://www.reddit.com/u/Dan_Bren/) with a quick update on today's DEEP ITM calls. + +[![r/Superstonk - NO DEEP ITM CALL BLOCKS PURCHASED TODAY (4/21)](https://preview.redd.it/0rve0srysmu61.png?width=1226&format=png&auto=webp&s=e12f5155f7ecc8bc1d7e2963ba12eef3863c2e63)](https://preview.redd.it/0rve0srysmu61.png?width=1226&format=png&auto=webp&s=e12f5155f7ecc8bc1d7e2963ba12eef3863c2e63) + +GME Biggest Options Trades 4/21/2021 + +There weren't any. (Large purchases) + +Nothing really new on this front so I wanted to take this time explain a bit more into how these DEEP ITM calls were being used to "hide" FTD's(Failed-to deliver). + +I personally was not the best when it came to explaining this but an ape with more wrinkles than I summed it up beautifully. BIG shoutout [u/ujar89](https://www.reddit.com/u/ujar89/) for this one: + +Here is the process they use to reset/hide FTDs. Please keep in mind Citadel is also a market maker. (Yes I know, conflict of interest). 'A' can be Citadel and 'B' can be Melvin in this example. + +1\.  A (the market maker) gives B X amount of synthetic shares (remember only market makers have this power). B gives A collateral so A doesn't get screwed (the collateral is basically the premium A pays to purchase the contracts from B). + +2\.  B uses those synthetic shares to close out existing FTD positions. + +3\.  B writes deep ITM calls (so A knows it's B). + +4\.  A buys the calls and exercises them receiving X shares back as IOUs. + +5\.  Now B has effectively closed out old FTDs while creating fresh new IOUs that will become FTDs in due time. + +6\.  Repeat as needed to avoid reporting FTDs and pretend like you covered. + +I hope this helped cleared up the inner workings of the process for some of you. + +See you all tomorrow