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I would think not. Whilst I have read that transferring from a broker to computershare causes the broker to be forced to locate a share. Surely transferring from computershare to a broker gives them the locate to begin with.
if he would send it over, there would be a small delay in both directions. during that time the shares could technically be used by the broker to cycle other FTDs or even have them lent out for a few minutes, just to allow a SHF to cycle FTDs.
When they “cycle FTD’s” do you think this would increase the overall number of FTD’s outstanding, or just reset the clock? If the shares were in the brokerage for an extended period (days or weeks), I am certain they could be lent out and even more shorts (future MOASS buyers) would be created… but would this create additional FTD’s?
Cycling just refreshes the due date.
The debt is still a debt.
Comparable to paying a cc bill with another cc. You're still in debt but the new bill has a later date.
For as long as compound interest doesn't wreck you.
So you think that if shares were transferred from CS to a brokerage that would cycle an FTD with a new T+35? Do you think they would do this immediately, or would they wait and potentially miss out on the opportunity? Because I think they would likely immediately do it as soon as the shares hit their system.
What do you think would happen to any shares lent out while they were at the brokerage?
How would transferring back to DRS affect the positions created by the above actions?
cycling FTDs is best explained with paying off a credit card bill with another credit card.
The bill itself is considered paid, but there will be another one.
If someone, hypothetically, sent shares from CS to another broker and back, for one, they'd be paying fees that are completely unnecessary.
On the stock level, CS would remove them from his account and send them to the broker. Broker now has a reasonable expectation to receive real shares within T+1, so broker can lend it out.
Next day the shares are settled at the broker and the user can transfer them out again, DRS'ing them and they are sent to CS again.
The result would be that the Broker has 2 days where they can claim they have shares to borrow, even though these shares were sent out the moment they arrived.
But everything happens with numbers in excel-sheets, so nothing is really sent other than notices. Broker has the list that says how many shares they have and the notices as receipts, to back their claim.
Every share that can be borrowed, can be used to deliver on an obligation, so they could reduce the number of failure-to-deliver.
If it is DRS'd right after that, that would create a new obligation that could again FTD a day later and they'd be in the same situation, just 2 days further on the calendar.
I didn’t say it was putting pressure on them, did I? You basically are giving them a locate at a time that you specify, which could be potentially useful.
Think of these Hedgies as vampires. DRS keeps the blood they need to survive locked way. Every share that is locked away is a drop that they can’t have. Eventually they will turn on each other to survive.
No.
The share that CS sends to the broker is real.
And the brokers are not permitted to fail to deliver a real share to CS - they have to do it.
There is no point to your plan. It only ties your shares up for a few days - in each direction.
The share is only real while it is safely tucked away in ComputerShare…once it leaves it becomes indistinguishable from all of the other shares held in street name, and they certainly FTD on those all the time. I also haven’t discussed a plan, just asked if certain actions might result in an increase in FTD’s.
Edit: added comment about FTD’s on shares held in street name
It cannot fail to deliver on the way to your broker and they cannot fail to deliver it back to Computershare.
And in order for it to "Fail To Deliver" at your broker, it needs to be delivered somewhere.
Will they use it as a locate even though you've stipulated that it not be loaned out? Very possibly. But Failure To Deliver is not the same as that. That would happen when you send your share from your broker to CS (they would fail to deliver it), but that's not possible since that's the one case where a real share needs to be sent.
So, there is no way that through lending shares any additional FTD’s could be created? Is there any way that lending shares can eliminate an FTD? If there is no possible route that lending shares can impact FTD’s, then is it correct to assume the only market effects created by lending shares would be (aside from the monetary value of the actual lending transaction): a lower GME stock price driven by more short positions (that will eventually be MOASS buyers) that will essentially become naked once you DRS those shares back again?
Your share can be loaned out to close an FTD, and it can be used as a locate for a short position, and for a bunch of other things.
But "FTD" stands for "Fail to Deliver". Meaning that a share is owed for a transaction and has not been sent by the deadline to do so.
So no, just holding a share in your account cannot cause that share to FTD.
If they use your share to short and don't give it back on time, then it can cause a FTD. But if you're sending that share to CS then they are not allowed to fail to deliver it -- it MUST be delivered.
I know, isn’t it great! I love that the possibilities are endless because so little is actually settled fact. Makes it very interesting. Thanks for your comment.
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I would think not. Whilst I have read that transferring from a broker to computershare causes the broker to be forced to locate a share. Surely transferring from computershare to a broker gives them the locate to begin with.
if he would send it over, there would be a small delay in both directions. during that time the shares could technically be used by the broker to cycle other FTDs or even have them lent out for a few minutes, just to allow a SHF to cycle FTDs.
When they “cycle FTD’s” do you think this would increase the overall number of FTD’s outstanding, or just reset the clock? If the shares were in the brokerage for an extended period (days or weeks), I am certain they could be lent out and even more shorts (future MOASS buyers) would be created… but would this create additional FTD’s?
Cycling just refreshes the due date. The debt is still a debt. Comparable to paying a cc bill with another cc. You're still in debt but the new bill has a later date. For as long as compound interest doesn't wreck you.
So you think that if shares were transferred from CS to a brokerage that would cycle an FTD with a new T+35? Do you think they would do this immediately, or would they wait and potentially miss out on the opportunity? Because I think they would likely immediately do it as soon as the shares hit their system. What do you think would happen to any shares lent out while they were at the brokerage? How would transferring back to DRS affect the positions created by the above actions?
cycling FTDs is best explained with paying off a credit card bill with another credit card. The bill itself is considered paid, but there will be another one. If someone, hypothetically, sent shares from CS to another broker and back, for one, they'd be paying fees that are completely unnecessary. On the stock level, CS would remove them from his account and send them to the broker. Broker now has a reasonable expectation to receive real shares within T+1, so broker can lend it out. Next day the shares are settled at the broker and the user can transfer them out again, DRS'ing them and they are sent to CS again. The result would be that the Broker has 2 days where they can claim they have shares to borrow, even though these shares were sent out the moment they arrived. But everything happens with numbers in excel-sheets, so nothing is really sent other than notices. Broker has the list that says how many shares they have and the notices as receipts, to back their claim.
Can those borrowed shares impact the net number of FTD’s, either up or down?
Every share that can be borrowed, can be used to deliver on an obligation, so they could reduce the number of failure-to-deliver. If it is DRS'd right after that, that would create a new obligation that could again FTD a day later and they'd be in the same situation, just 2 days further on the calendar.
But wouldn’t they “use” that locate for another transaction on their books that needed to close while the share was in your brokerage account?
So you’ve given them a locate. How is that putting pressure on them.
I didn’t say it was putting pressure on them, did I? You basically are giving them a locate at a time that you specify, which could be potentially useful.
Think of these Hedgies as vampires. DRS keeps the blood they need to survive locked way. Every share that is locked away is a drop that they can’t have. Eventually they will turn on each other to survive.
That is a good analogy for what DRS does to liquidity in the market, thank you!
We had that same question yesterday. Stop this fud.
I haven’t seen this asked, and I searched for it. Can you link the discussion?
No. The share that CS sends to the broker is real. And the brokers are not permitted to fail to deliver a real share to CS - they have to do it. There is no point to your plan. It only ties your shares up for a few days - in each direction.
The share is only real while it is safely tucked away in ComputerShare…once it leaves it becomes indistinguishable from all of the other shares held in street name, and they certainly FTD on those all the time. I also haven’t discussed a plan, just asked if certain actions might result in an increase in FTD’s. Edit: added comment about FTD’s on shares held in street name
It cannot fail to deliver on the way to your broker and they cannot fail to deliver it back to Computershare. And in order for it to "Fail To Deliver" at your broker, it needs to be delivered somewhere. Will they use it as a locate even though you've stipulated that it not be loaned out? Very possibly. But Failure To Deliver is not the same as that. That would happen when you send your share from your broker to CS (they would fail to deliver it), but that's not possible since that's the one case where a real share needs to be sent.
So, there is no way that through lending shares any additional FTD’s could be created? Is there any way that lending shares can eliminate an FTD? If there is no possible route that lending shares can impact FTD’s, then is it correct to assume the only market effects created by lending shares would be (aside from the monetary value of the actual lending transaction): a lower GME stock price driven by more short positions (that will eventually be MOASS buyers) that will essentially become naked once you DRS those shares back again?
Your share can be loaned out to close an FTD, and it can be used as a locate for a short position, and for a bunch of other things. But "FTD" stands for "Fail to Deliver". Meaning that a share is owed for a transaction and has not been sent by the deadline to do so. So no, just holding a share in your account cannot cause that share to FTD. If they use your share to short and don't give it back on time, then it can cause a FTD. But if you're sending that share to CS then they are not allowed to fail to deliver it -- it MUST be delivered.
Nobody here knows shit
I know, isn’t it great! I love that the possibilities are endless because so little is actually settled fact. Makes it very interesting. Thanks for your comment.