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Retail Traders Are Going Bananas -- Stocks, Crypto & SEC Report
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Dumb Money w/ Matt Ep. 108
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200 and i eat crayons every day with my friends, i think about kenny in his ivory tower shaking in these lily bones, as the eggs overpower must suck to lose to a monkey so dumb. But you made your bed and you got nowhere to run i'd love to be a fly on the wall when he makes the price fall and he watching as we keep on more. You forgot we're on the floor. Blind two hours is fucking money for each other.

My sisters and my brothers, the fighters and the lovers we don't need another fan because we huddled through hard times what is going on moon gang mum, gang hello, hello, hello, welcome to the show it's dumb money - hey! It's me matt, it's tuesday, october 19th, in galio galio gali. We have quite a bit to talk about today. We see that some of our favorite moon stocks on the move overall market on the move crypto on the move, new etf dropping today and, of course, the biggest news of yesterday. It doesn't matter what happened.

The important thing that happened was the gme report came out and we have to talk about it. I know i know i know i know. I know every single creator out there like already has a video on it. So i'm not going to go to too in depth on it, but i do want to bring up three distinct key points, um, one of which i don't think is being talked about by really anyone and i think the other one.

In a way they gave us. The report as if it were we're comforting of like oh, we found this and you're gon na it's gon na all like make sense as i go over it and then also right after the bell. The bell goes: ding, ding, ding and then five minutes into that. I'm pretty sure that uh daddy gary gensler will be on at 9.

35. 9. 35 a.m. Cnbc.

So, of course, we're going to be listening to that five minutes into the bell, because he's going to be talking about this report, uh sec, chairman uh, very very excited to see what he asked us today about it. So i'm going to try to get all this in in the next. What 28 minutes we'll watch the five minutes of opening quite a bit of things to hop into and i'm ready for whenever they actually get going. So here's what you need to know about today: stock futures, jump after s, p, 500, nasdaq long four day, win streak we're seeing green green green.

A lot of this has to do with good earnings reports. Uh, i'm going to talk specifically about j, j and p g, but overall banks did pretty well health insurance, doing pretty good, it's not perfect, but there they're beating expectations uh next week. A big one, that's coming up is apple, so mark that on your calendars - and just so you know oil ripping. So when we're talking about the overall market, sometimes it is useful to talk about like some of these major things like the petrol dollar right here uh.

We went over 83 dollars, still sky sky high and then another thing that's been highly correlated with the s. P lately has been bitcoin and we know that new etf from pro shares is coming out today. Bito that's pushing 63 000. We are not far away from an all-time high in bitcoin, so generally markets.

Looking green, the spy, the qs iwm bitcoin, major major markets in the green. Now more specifically, both j and png reported before opening today, like they just reported um, they did well. They did well, it turns out j j made a half a billion dollars off of its vaccine uh the new york times reports that the fda is expected to clear, j, j and moderna the booster such and allow the mix-and-match shots um pfizer. Just so, you know already got approved for the booster, so j and j doing pretty well interesting about png shares of procter and gamble are currently down and they did beat.

They had better than expected earnings, but the issue is, however, higher costs were a drag on profits which slightly lowered the same quarter a year ago, higher costs. This is a theme that we're seeing more and more higher costs across the board. Lower supply higher demand. Labor is going up, gas is going up, coal is going up, oil is going up, auto energy everything it's just slightly going up.

This is what i've been talking about as it's: it's an inflationary environment, that's what you get when people are shut in for a year and a half people are losing their jobs and the federal reserve is pumping trillions of dollars into the economy. That is the the recipe to create inflation kind of going off of that tail. A little bit. One way to hedge against inflation is gold, and some people are arguing that digital gold, aka bitcoin, is an even better option and today bitcoin pushes higher again ahead of its first etf launch.

This is coming to us from pro shares. Pro shares has a bitcoin futures etf, so whenever you buy an etf, an exchange, traded fund, it's a basket and you're getting the proportionate exposure to the things in the basket. For example, the s p 500 that spy is tracking that index and that particular basket is 500 of the biggest companies in the us russell 2000. 2000.

Small cap socks, the dow 100 um, the nasdaq 100. Excuse me the dow 30.. You get the the proportionate exposure to everything in that basket with this, though, the pro shares one just so. Everyone knows this is giving you exposure to bitcoin futures, which is highly highly correlated to bitcoin, but it's not technically direct exposure to bitcoin.

Now a lot of people are saying: well, hang on what, if i want an etf that does give me direct exposure. Well, it did come out that grayscale is looking to convert their current crypto fund, a gbt sue. They are looking to make that a like a bitcoin etf, and actually i have that headline right here, for you, grayscale confirms plan to convert gbtc into bitcoin etf, they're, hoping that it happens by the end of the year. He was on cnbc yesterday.

The ceo of this today i'm happy to confirm that grayscale will file for gbtc to be converted into an etf as soon as there's a clear, formal indication from the sec. So hey that's pretty solid. I like that. I, like the sound of it.

That is very, very good news, and even this one's good news, uh, we are looking for look at this. Four. More etf providers are hoping to move forward with trading this month, most likely going to be bitcoin futures. A second futures based etf could come as soon as this week and that's talking about valkyrie, so we're still talking about bitcoin features, but still in etf.

I like it. It's there's various reasons. It um right now the ira, that system within the us about 12.2 trillion dollars as some of that even a small percentage gets exposure to crypto. Obviously, that's going to be beneficial to crypto um, the sentiment that, as in the sec, the u.s government being more accepting of it.

Obviously that's going to help crypto and it's just more accessible. There's going to be a lot of people out there who they're very comfortable with their fidelity their e-trade wherever their retirement account, is they don't feel like getting a crypto wallet, a crypto exchange, a crypto broker, but now those people will get exposure to buying it if They so choose so for me, bitcoin futures right now, it's going to be an indirect benefit and then, as we see more of these spot, etfs things that are going to be physically settled and you have direct ownership of btc uh. That's what we're talking about with grayscale, that's going to help it even more so so still very, very positive, and just in the general sense as the environment, the regulatory environment, the economic environment as we're seeing more and more in these signs of inflation. I honestly think that strengthens the argument to get into crypto, so you don't get a net loss of just holding it in usd.

So the big news of the yet yesterday of the yesterday sec says: brokers are making trading into a game to lure investors. I find this to be thoroughly interesting, thoroughly interesting, different mainstream media and different journalists and different newsletter writers. All of this, it was nice to see who's on our side and who's, not on our side, various people through this 40, what 445 page document they pulled out? Nah, it's gamification they're still trying to blame it on social media. They treated it like a game and it's their fault, blah blah blah, and i find that very interesting because that was not my takeaway.

Did they talk about gamification yeah? I think that's something that we can have an adult conversation about like, should they be doing that, should they not, but in the laundry list of things that are problematic for the overall market, it is not the gamification the sec said online brokerage is enticed to increase Revenue through the controversial industry, practice of payment for orderflow are turning stock trading into a game in order to encourage activity from retail investors. Now i don't know about you, but in my time of using things such as robinhood and weeble, i've never been like i'm gon na bet, dollar value x, and i see a really cool animation. I'm like might as well double down now. That was a really nifty, gif, never ever happened to me and maybe there's a subconscious impact and then you're like okay, you like it more, but it was never because of animations that i wanted to bet more.

I think people were tracked into robinhood because it the the learning curve, was easy to get over. They presented it in a nice ui ux way, and i honestly think that other brokerages should resonate that, because why should it be difficult to use? I think people all of a sudden you're talking about making and losing money. You're talking about numbers, you feel eyes glaze over and robin hood came in and they're like hang on. If we have a good ui, if we have a good user experience, maybe people will like it more because they can actually understand it and they're not going to feel stupid when they open up like an f f, whatever 150 fighter pilot of a brokerage, and it's Confusing people like ah screw - it's not worth it um, so i honestly think that other brokerages should try to make the experience as easy as robinhood has, and this gamification thing yeah.

Okay, like we could let people discuss that as they want to, but i'm going to come back to this report and do like my full, like i said, i think i have three individual things i really want to highlight and one of them, i'm not seeing people Talk about very quickly, the 10-year treasury yield ticks higher ahead of housing report, so the housing report already came out and it was not good, not good, not good, not good, look at iwm down spy down and here's what happened. So it was the new residential construction. They were estimating a drop of 0.3, but instead it came in as a drop of 1.6 and building permits dropped by 7.7. A lot of this is saying: uh cost of supplies is too high.

There is not enough of a labor force to build what people want to build, and people really just don't have the money so once again, as i'm tying it back to what we saw from png a little bit of inflationary environment. And i don't want that to panic anyone it's just everyone needs to be informed, so you can make better decisions. So if you're looking for some sort of hedge, whether it's whatever i don't care gold, bitcoin, silver, copper, if you just want to buy some tulips, i don't know there's many hedging mechanisms out there. It's just you got ta, know the environment that we're actually in right.

Now, all right, so, let's tee this up and i wan na dive right into this report. Let me make sure that i have it right here: um scc, says brokers, enticed by payment for order flow, are making trading into a game to lure investors. So once again, they're really focusing on the gamification part of this, and if i were to talk about the psychology of any of this here's the psychology for me um, because my buddies and i were like yeah it's october. Let's do sober october um, the biggest psychological impact for me.

Was i've been trying to do sober october? I really really have the report came out. I wanted to read it thoroughly. I knew so many people were gon na rush on it. They're, like i just got ta, i got ta tweet, something i got ta write, something i read it.

I got ta make a video. I knew a lot of people were gon na rush for it. I was like. Ah, this is important.

This is something that it takes time to dive into, so i read it. I read every single word of this report, all the pages, every single word on it. I read it. I read it.

I read it. I was like took some notes and i was like this doesn't seem good this. This does not seem good, so you know what i did. I went to the closest adult beverage shop near me in philadelphia and i bought some and i was like okay.

There goes sober october had a couple libations and i read it again then i was like you know, matt before you get really mad before you start filming yourself talking about this, maybe not the smartest brand move. Maybe your sponsors aren't gon na, like if you're just a little tipsy on camera talking about a report. Maybe you should sleep on it. I was like all right.

That's reasonable matt, so i slept on it set my alarm for a little bit early got up again today and i read it again and at each iteration of me reading it. I still came to the same conclusion of what the fuck seriously like this isn't. Just me of like oh man, matt swore matt never source. He must be serious like this is just absurd of what we're at like this was the opportunity for our regulatory bodies to finally look into something and make the retail trading and investing public feel like a little bit safe in the overall system that we have going On and i don't know about you but going through that report, it's it didn't make me feel any better about, like oh okay, like we're playing in a pretty reasonable domain that i'm i'm happy to be him.

So if you don't have it, i can post this later, but this is this: is it staff report on equity and options, market structure, conditions in early 2021 um, here's the breakdown of it, and it's it's like a really good high school report or really bad college Report like somewhere in that domain, but there are things you can actively learn from this, like entire section, two u.s market structure and securities regulatory framework, if you're a little bit just curious about some of this market structure stuff - and maybe you don't want to take my Word for it dave, lauer or other people on social media. I mean this is some of the writer from the sec like you can actually learn something like i'll give them that like it is it's just blatantly saying this is what a short squeeze is. This is what a gamma squeeze is. This is how trades are set like it's a good learning mechanism, especially if you're like newer to the market um and then right here.

They specifically wanted to talk about gamestop and, if you read it somewhere, they're, basically just saying that they wanted to dive into gme from like the viewpoint of market structure, so in this their their intent with this was not to dive into like, i guess, the social Aspects of what happened: it was very much game, setup and market structure and how we got to where we got now. There's a couple things. I really really want to go over and let's start right here, so i'm going to go through a couple pages, i'll call them out, so you can like return to them if you want to check them out yourself, but this is on page 26. very, very interesting Here short interest ratios tend to be quite low for large non-financial stocks.

They are often less than 2.5 percent, whereas for small non-financial stocks, they still tend to be less than 13 few stocks, if any, have short interest greater than 50 on a given day. Until recently, short interest for more than 90 percent was observed only a few times in 2007 and 2008, when examining short interest, as a percent of shares, outstanding gme is the only stock that the staff observed as having short interest of more than shares outstanding in january. In 2021, so it's kind of funny the way they did this right here, but it was above 100 like they don't want to write that out. I think they do it somewhere later um at one point: they knew that it was 109.

Another point i think they point out: it was like 121, but all the shares in existence more shares than that were short now right away. A lot of people are like whoa whoa whoa. How is that possible, and it actually through a legal process a as in our the way our system is currently running? That is a possibility you can have that it's called rehypothecation you own shares. I want a short, i borrow them from you.

I sell them to the market, there's a new owner that new owner wants to lend theirs out. There's a new short, so it's just borrow land short borrow land short borrow, then short, borrow land short. It's a daisy chain out. It's called rehypothecation, that's mechanically! How you can get of above 100 now? Does that mean that it was all done legally and above board? Is it way easier to get above 100 when you're going through more of an illicit, illegal manner? Well, yeah, of course, but like just because it's above 100 doesn't necessarily mean that something nefarious was going on um.

That's i'm not saying that's what did happen, but i'm saying you got to learn a little bit about rehypothecation, but i do think it's interesting in general that the sec staff is pointing out that the short interest gme had in early 2021 january of 2021 was extraordinary. It was by definition, extraordinary, so that's how i want to start us off, but now, let's get into i don't know something. I i consider to be a little bit more uh. I think they gave us this report to kind of calm us down and i'm seeing some of our favorite opponents on social media be like look the it's wrong.

They don't know what they were talking about. Let me go through what i'm talking about and then let's go over. Some of the conclusions that we can truly draw figure 6 shows that by volume and gme, including by volume from participants identified as having large short positions, increase significantly beginning around january 22nd and remained high for several days, corresponding to the beginning of the most dramatic phase Of run-up in gme's price, the same figure shows that the run-up in gme stock price coincided with buying by those with short positions. However, it also shows that such buying was a small fraction of overall buy volume and that the gme share prices continue to be high.

After the direct effects of covering short positions would have waned, as in they're saying many shorts did not really cover they're, saying that the buy pressure came from buying like just good old-fashioned, buying, not buys to cover, but hang on, there's more uh and here's figure six. So the the pink right here this is the short seller by volume most of the buying that we saw this was just good old-fashioned buying buying to create a position very very interesting, hang on there's more, but wait, there's more as noted above staff did not find Evidence of a gamma squeeze in gme during january 2021.. That's pretty crazy, so right away, we have this. This is this is written in the official report by the sec when gamestop went from sub 10 to 500 they're saying not a short squeeze, not a gamma squeeze! Well, that's fascinating.

A lot of people are going to take that in a certain sense to be like look at this community's stupid they're, dumb money. They don't know what they're talking about haha they're wrong. I would prefer to look at it a different way, so the sec has admitted this was not short covering um like some shorts obviously did cover. We can see that in the pink, but they think a gamma squeeze is even less likely.

I even think they straight up said that at some point, while a short squeeze did not appear to be the main driver of events and a gamma squeeze less likely, the episode highlights the role and potential impact of short selling and short covering so short squeezed. Not the main driver gamma squeeze less likely that is written by gary gensler himself. He signed off on this okay so that craziness and price, as you go through this you're gon na quickly realize that it was retail buying, as in the thing driving it up. Was retail buying and then through various events, including robin hood, citadel securities and the nscc and potentially other players they removed the buy button? They moved to position on clo position, only close poc gamestop other stocks right there.

So if we knew it was generically the retail population driving the stock, we know that the one thing that was actually moving in this event was stopped. They said you can no longer buy across various brokerages that had massive massive exposure to retail traders right there. What was gon na happen to the point that could have legitimately triggered a gamma squeeze and a short squeeze, definitely a short squeeze. They stopped it.

This it's written in front of us that they 100 got in the way they said you're not going to do it. They got rid of the buy button, they stopped the they stopped the movement of the stock, they violated all rules of supply and demand. They completely completely got rid of demand. It was retail that was driving it.

They stopped retail, completely chopped them down at the knees. Unless you were one of the lucky few to be on a brokerage that didn't impose any of these rules and they stole billions of dollars, i'm not saying that hyperbolically, i'm saying that very legitimately, that's how much money was stolen from your pocket. That's how much still money was stolen from my pocket. That's how much money was stolen from retail traders.

It was billions of dollars. The sec has clearly admitted to it there. This fact that we didn't get to the point of a short squeeze didn't get to the point of a gamma squeeze. It was us driving it.

They stopped it. How like? How else can you consume this that it's absolutely insane but there's another thing. I really want to dive into, and i know i'm running low on time before the bell goes ding ding ding, but i find this interesting. The unusually high amount of short selling raised the question of whether some of the short sales were naked staff did observe spikes and fails to deliver in cme.

However, fails to deliver can occur either with short or long sales, making them an imperfect measure of naked short selling. Moreover, based on the staff's review of the available data, gme did not experience. Persistent fails to deliver at the individual clearing member level, specifically, staff observed that most clearing members were able to clear any fails relatively quickly blows my mind. They talked about ftds.

Do they not even know the type of ftds? One of the main things i'm complaining campaigning for is getting more information on ftds, okay, we know them and we know there's various types. Give us a more detailed report give us the report more expediently. It seems like the sec doesn't even know they're like yeah, okay, here's what an ftd is, but remember it's generic form like anyone can produce it like they didn't even say what the type of ftd was. They didn't tell us how it was solved.

Were they actually delivered, or did they solve it? In another mechanism? They literally just defined what an ftd is and said that gme had a lot. We have no information on who prompted them and how they were resolved and any future plans to not let the ftds get so out of hand. I find that one to be absurd, absurd and then here let me go down to 33.. I want to talk about this one narrative at the time attributed to the broker dealer trading restrictions to pressure hedge funds and their commercial partners for the restrictions.

Instead, some of the impacted broker deals maintained that the trading restrictions were a reaction to margin calls and capital charges imposed by the nscc in response to an extraordinary volatility in gme and other stocks. So they're, basically just saying hey, we had a government healing. Nothing came out of it. Um they're, basically saying we have not looked into any communications between robinhood citadel securities and various, i guess sub-branches of the sec.

They have not looked into it. I guess they're not going to look into it. They're, like there was a congressional hearing, we're good there's, no way someone would ever lie, there's no way only piss-poor questions were asked and we actually don't have anything useful to go off of so right here. If we ever get a good sequel of this report, i would strongly argue - and i've said this, but i think it's where we need to go with it.

I want to know all the communication between robinhood citadel securities, the sec and any other governing body. The nature of that communications and all trades from that time period, they're specifically talking about citadel securities. Why can we not subpoena citadel's trades, they're, saying hey it's com, two legal distinct entities, there's no way citadel securities and citadel's talking. Okay, prove it show us your trades.

Let the sec dive into it and, let's see if they were trading on something that they should not have been trading on absolutely insane, and let me just rewind this a little bit back up to 30 back up to 30 right here. Further data shows that market makers were buying rather than writing call options. Now, i'm not seeing anyone talking about this. This is on page 30.

It's the first paragraph, the end of it further data shows that market makers were buying rather than writing call options. This is fascinating um. I think it's one line that a lot of people are missing out on and they're using this to be like look, there's not a gamma squeeze. You know what this tells me.

This tells me that too many participants came to market makers. They're, like we want a short, we want a short. We want a short and they're like we don't have the shares and they're like cool. All right.

We want to buy, puts market makers we're like great we're going to sell you a bunch of puts well. If you sell puts for them to hedge, they have to take it short and remember. Market makers can have the ability to do whatever they want. Basically, when they want to make shorts, they don't have to locate shares well to hedge on that or to even create the shares for the anyone coming to them any client that wants to go short.

What they're going to end up doing - and this was fully discussed with myself and marco hodis - it's up on the coors light channel check it out of how to like legally get away with naked shorting here's what they did, they sold! No, no! No! They bought many. Many deep in the money puts high strike price, they bought a lot and then they sold calls so right here like if the stock is, let's just say it's trading at 10. They might have with that between the buying of puts and the selling and calls one is going to be deep in the money. The other is going to be deep out of the money, both a very high strike price.

What this does is if the stocks, let's just a random stock, xyz they're, going to be talking about like uh, their inherent price, would be 11. That's the vig of a dollar, the juice of a dollar and remember, they're, going to get commissions and kickback for doing that. So they have a little bit of a. I guess a little bit of free range, they're playing the spreads and remember because they bought so many puts.

If it goes down, they don't care at all if it goes up. They're gon na start to get a little bit worried um and, as it really starts to go up and those puts expire worthless, the puts that they bought. Okay, that's problematic, you know where it really gets problematic is when all these calls look it they were buying. Calls the tail of that call as all those calls that they were basically selling going out.

That's where they get screwed, that's the money they don't have and all of a sudden. Now we see that they're buying. All these calls to cover up a position to bring them back to net neutral. This is absolutely insane and i think it furthers the argument that, if we're just rudimentary looking at the naked shorts of just like, oh, this prime broker allowed this we're not going to see that those would show up in the ftds and even in real time.

We're not really seeing that now. I think the key to all this truly is deep in the money deep out of the money calls and puts, and the way they're, using those to balance positions and get away with a super unethical, but essentially legal, naked short position. They're synthetically showing that they're long or short or neutral doing whatever they need through the options market, and this line right here. It's really diving into that concept.

If you want to know more about the specifics of this, i'm telling you i discussed this fully with marco hodis, it's on the coors light channel. I like spliced that part because it's so so important, but it's all about buying deep in the money puts selling deep out of the money, calls to create a position. So you can sell some of these shares to people who want to go short and then they're. Trying to save themselves by going net neutral through them now buying calls absolutely absolutely insane, as i think more about this as more things develop, i'm happy to continue to talk about it.

But overall, this report is anyone surprised um. Is anyone surprised at all? Of course, i'm right there with you, i i wish we got some of those answers, but i don't think that was the overall point of their investigation. I don't think they were here trying to say: let's figure out, is it legal that they took away the buy button? Was there any pressure to take away about the buy button? Are we gon na? If it is legal, are we gon na make a rule in the future to make it illegal? They had the sec, had the opportunity to win the trust of the retail trading and investing public and thus far, i think they have fallen short of that goal. Anywho ding ding ding, the casino is open.

Let's get going. Ah, let's get going, let's get going, you know with it and it's tough to completely. I don't know be like there's a lot of things that if there is some sort of an additional investigation - well maybe they don't want to announce that like so maybe that's a little bit of optimism that i'm holding on to be like, maybe they do have people In their crosshairs - and they are basically just doing the investigation and they're not just going to run around, be like hey we're looking into you we're looking into you. So maybe i'm holding out i'm holding out a little bit of hope that something is being looked at.

In the back end - and it would just be disadvantageous for them to announce it publicly but remember in a couple minutes gary gensler is coming on and we are gon na be listening to it uh. I just wanted to get everyone up to speed on. What's going on with the report um in terms of amc, remember we're looking for the gap fill up to 44 20.. That's what i'm looking for in the short term, jimmy i'm looking for the breakout of 190 and then hopefully a breakout of 200., the spy and the russell looking a little bit weak today, a little bit weak, but let's see if they base, i mean, obviously we're Only a minute and a half into the day, um, where are we at prague, is on the move congrats, if you're in prague, uh the the break in the hold of three at 3 30 prague is destroying it.

Amc is destroying it 43.50 right now, let's get going folks, let's get going. If you haven't already uh the bell just went ding ding ding. I would appreciate if you could drop a like it does help bring other people in here. If you haven't already don't forget to join up with the moon gang by hitting the subscribe button, if you're on rumble or youtube, don't forget to hit the follow button, if you're on twitch uh liking, following something all that stuff is completely free and it's honestly, the Only thing i ask for in terms of like the effort that i put into just helps me out with the algo that engagement helps get this presented to other people.

It really does mean a lot to me. I appreciate it. Thank you and amc is looking good good good. Is he coming up i'm waiting b-i-t-o.

We should probably throw that up today. Why not? Why not b-i-t-o it's trading trade and trade in a way the bitcoin futures we're looking for the gap? Film? Okay, folks, i need a number for amc today of the hot chip challenge. Before we get going, we should be doing it before the market opens um. Today we could call it 47.50.

Is that good with everyone, if amc touches 47.50 today, 47 and 50 cents that would trigger the hot chip challenge for me to eat the hot chip uh 47.50? Let's get going all right a couple minutes, i'm just i don't want to miss the gary gensler talk. Actually you know what i could do all right, i'm listening to it in the back end, so we don't miss anything all right. Let's get going, let's get going going going going, b-i-t-o, there's b-i-t-o, uh tesla also have been a very good day. Just so you know about tesla.

It is uh. Still the number one discussed stock on wall street bets subreddit. So getting a lot of um. I guess activity there, we go man, look at this gme trying to break out right at 190.

Amc cruising to 44-20 cruising cruising cruising cruising. What a day, what a day all right, we are waiting, come on moments away, sec chair gary gensler. I know there's not sound yet uh amc, looking good amc already up one point: two: eight percent jamie up: 2.25, hey dollar at a time like, let's no, no date, expectations, no price expectations. Let's play level to level levels of support levels of resistance, read the technicals to the best of our ability stay up to date on what's going on with the sec stay up to date, on earnings announcements stay up to date on the box office, stay up to Date on the reasoning of the short, so we're better in their head, hey, we just got to be a bit more professional, a bit more prepared and i think we could crush this.

I i think a lot of people are saying: it's hey. It's a corrupt organization wall street, the government. All of that there's no way we're gon na beat it well we're not gon na beat it with that type of an attitude not at all all right. We are a couple he should be coming on like now, not yet uh bitcoin bitcoin is on the move.

Bitcoin is on the move, folks gunning now for the potential all-time high. What are we at 60, just below 100 below 65 thousand? So sixty four thousand eight hundred and ninety bitcoins looking good. I bet this keeps going. This is coiling up.

Remove cup handle strong, bito, crushing it man congrats, if you're in crypto b-i-t-o, is looking good prague, giving back some of the gains, but still up i mean it's up, nine percent gme is looking good. Amc is looking good. The markets are looking green folks. Looking green, looking green all right come on nothing yet uh, they're talking about the variant bitcoin futures, beginning trading, i'm just waiting for gensler to come on.

Look at this getting ready, ding, ding ding for this gap, phil 44 20, the low from september 17th. Look at this crushing it crushing it crushing it crushing it thanks very much for joining us good to be good to be with you bob. So i want to talk about your gamestop report, but i have to start with bitcoin. We've got a raft of cheering people down here from pro shares.

The pro shares uh, bitcoin etf, the futures etf, is starting trading just started a few moments ago. I have to ask you: can you can you explain to our viewers why you chose to allow a bitcoin futures etf to begin trading but have not yet approved a regular bitcoin etf, um bob. Thank you for that question, uh. Just to give you a little context, i think that we in the official sector uh, should be uh technology neutral, but not policy neutral, and so what we're trying to do is ensure to the best we can within our authorities to bring projects into the investor protection Perimeter and so what you just mentioned - uh bitcoin futures have been overseen by our sibling agency, the commodity futures trading commission, which i was once uh honored and proud to serve there and that's been four years, and some of these applications came in and went effective as You said one of them went effective with regard to those uh products over at the chicago mercantile exchange that our sibling agency oversees.

I think the important thing here is you've made it clear in the past that this does not have the some of the concerns that approving a full bitcoin etf would have you don't have people breaking into exchanges, for example, you don't have problems with fraud, uh or Manipulation was that a factor it seems that that was a factor in the fact that you went ahead and allowed the bitcoin futures etf. You don't have those particular problems here. Well, while i'm not going to get into any one application or project, i think what you have here is a product. That's been overseen for four years by a u.s federal regulator, the cftc and that's being wrapped inside of something that which is in within our jurisdiction, called the investment company uh act of 1940., so we have some uh ability to bring it inside of investor protection.

It's still a highly speculative asset class and listeners should understand that underneath this, it still has that same aspect of volatility and speculation uh, but there's uh. Our sister agency has ever seen this uh for four years and then it brings it inside. As i said, uh an 80-year-old law here at the sec. Let me move on to the gamestop report: uh a usual thorough report from your staff.

I think this will be the historical record of what happened, but i'm curious about the recommendations you you have been talking for many months about payment for order flow and gamification and the potential deleterious effects of of both of these uh on the u.s trading system. And yet there was no discussion about how this might have impacted the trading uh for a gamestop, i'm wondering if there is some kind of connection was payment for order flow and gamification a factor in what happened with gamestop or not. The report doesn't say so. I think that uh, the events of january revealed a number of things and, as the staff suggested for additional consideration, these two topics plus two others - that we look out for the investing public when brokerage apps when robo advisors are using uh new data analytics and and Marketing to us and using behavioral prompts to possibly get us to trade in a way that benefits them benefits the application and the program uh in conflict, potentially with what benefits us.

The investing public uh, also uh, embedded in some of those issues, are the structure of the stock market itself. It's so much of the market now, as is evidenced in the report in january in these months, about half of the market, is not going to the transparent sort of market that fully lit market that you earlier showed, but it's going to dark pools and wholesalers. So those issues uh the staff - suggested up uh we're going to take a closer look in terms of what policies can help the public uh chairman. Guess it's great to have you on the show again uh.

I know that uh your position on trying to invest well. Uh, i read a great book that you wrote about no free lunch, that's why we have diversification, and then i read this report and i absolutely understand it's very thorough. It's got great stuff and talks about how options didn't really affect things. What did impact and then on page uh? The last uh notes, uh number two there's this sentence: uh payment for order flow and the incentives it creates may cause broker-dealers to find novel ways to increase customer trading, including uh, through the use of digital engagement practices.

I read this and it felt like a bit of a lamentation. I felt that, right before that, you talked about, don't forget, uh companies uh, underneath the memes are actual employees, customers plans to invest, and then you get to this and i wanted you to be able to say it. Maybe this is unfortunate, because i know that people want uh. They want to open, have as much engineering financially, but this is not chairman.

Gensler, chairman gensler is against any idea that we should be doing these digital engagement practices that might hurt investors. So let me sort of address that i think that we've found throughout our economy uh on platform after platform, whether it's in in streaming apps, retail, apps, uh of various social media that we're in a transformative time. The 2020s is rapidly changing. On top of the invention of the inter internet, many decades ago, we have data analytics artificial intelligence that markets to each of us a little differently.

I mean you might type something in a text and then all of a sudden find you're being advertised, something you type to a personal friend in the text. So those features are all around. What we're raising the question is: is in finance, what does that mean for finance these digital engagement practices? The the underlying separating you from me and from all of us and then if the application's marketing for their revenues and payment for order flow, does have an inherent conflict that the brokerage application is increasing their revenues. If we trade more and so are they using these behavioral prompts to get us to trade more or to move to different products, options, trading or trading on margin which inherently have more risk in them and where? Where do we, the sec help the investing public act? Uh to help them do well when there's these inherent conflicts inside the uh, it's kind of inside the box right, but i i guess what i struggle with is you've got this great moment here.

There are. One million of these accounts belong to investors with an average age of of 19.. I think these investors, if they're, focusing on let's say, trying to put together a fantasy team, i think they're spending a lot more time on fantasy, trying to figure out who who's on waivers tonight uh how to be able to make it. So what what's the line? What's the over they're spending more time, chairman gensler, on their fantasy lineup than they are trading they're trading like banshees? Don't we want to encourage them to spend as much time as they do in their fantasy lineup? Well, i think that that investing for the long term tends to have higher returns than day trading or even hourly, trading, and sometimes not always, but sometimes these applications encourage individuals to have high trading volumes or trade on origin or options that have inherently higher uh risks And so that's where uh there's there's a worthwhile public debate, and i think i thank the staff for the sec to serve up this report.

I think yes, as you said earlier now, it's the job of the commission to sort through what we do with these uh additional considerations. Uh, mr chairman, the staff determined that a short selling squeeze was a factor, but it wasn't the primary reason for the big sell-up uh price run-up in gamestop. It was positive sentiment, i'm reading from the report here that sustained the weeks-long price appreciation positive sentiment, not the short squeeze short covering was a small fraction of the overall buying volume. I guess i'm wondering, though, despite that you've been talking about potential changes in short selling rules, do we need to make any changes? Do we need more, for example, disclosure about short selling? I i think that the markets could benefit from greater transparency, not only on short selling, but a related activity in the markets, which is called stock loan.

When you borrow a stock to sell it short congress. Actually, our u.s congress actually about 11 years ago passed two provisions that mandated directed the sec to great to do greater transparency in short selling and this related activity stock loan. So i have asked staff for recommendations on this to promote, meaning that, on a on a regular basis, the market would benefit from seeing the volumes and activity in the lending market, meaning lending securities and also this short selling activity just to follow up on payment. For order flow, most most viewers of uh the trading activity in the last 30 40 years - agree that the american investor has never gotten a better deal.

Not only the commissions essentially go to zero, but even trading costs are much lower. Execution. Quality has improved dramatically in the last 30 years. I know there's a little bit of debate about exactly how much, but the average investor seem to be getting a very good deal.

Can you do you feel you're going to be actually able to demonstrate a real harm from payment for order flow number one and number two: can you tell us what comes next here? You've got the commission with your staff with a very excellent report on the facts, but not a lot of direction about where it should be going. Is the commission then going to meet and make recommendations or make rule changes uh from here? What's the path here forward? After this commission staff report, well, let me say this you're right that our markets have gotten uh, more uh um to have moved to zero commission, but it doesn't mean it's free, there's, still a payment underneath these applications. It also doesn't mean that it's always best execution and we've had we've had cases where we've announced in the last uh 18 months, where there has been this conflict between the broker, on the one hand, and this payment for order flow on the other. And let me just remind your viewer that if you place a retail market order, as shown in this report, the vast majority of those don't go to the transparent lit markets.

They go to the dark sub market, these these pools that are not competing, and so i've asked staff. Can we achieve this simple concept that your order when you place it competes with other orders and buyers if you're selling will compete to get and to pay you? Hopefully the best execution for that price order by order by order that's what i've asked staff and i think that that's an important concept of competition that helps the investors on one side helps the companies on the other side that are raising money in our markets. Well, mr chairman, again i want to praise the staff because those who read this will know there was not a vast conspiracy against them, which was really the topic that i know a lot of us felt. We were really razzed by because we were all in on some sort of citadel conspiracy.

I think that's completely bustedness, but there was something on page 12 that disturbed me. You talk about some in the marketplace may possess superior information about underlying assets. That, sir, i think is illegal, did we discover that some had superior information and there for sure, should be in front of the commission to find out what that went on? Well, i think that you chose the words carefully, maybe there, but when, when order flow, when when trading is being purchased and sent to one wholesaler or another wholesaler, then they have information that the rest of the market may not have at least for a short period Of time and and even milliseconds matter in these markets, and so that's what we're also looking at uh you're, absolutely right that we, i think from a policy perspective, want to look at that and how we instill greater competition. In essence, for that data, as well as for that order flow chair, gensler uh, chair against david faber, here um, you know we had you on not that long ago.

Obviously a long-ranging interview i wanted to come back to spax. If i might just for a moment, um haven't really heard that much from the sec yet, and i wonder where you are because it does appear that the market has been making its voice heard when it comes to spax. We are seeing the sponsors uh changing their compensation arrangements, we've seen the pipe market really freeze up uh, and so is the market doing its job, and the sec, therefore, perhaps doesn't have to take significant action in any way in terms of regulation for specs. I i think that there uh is, is a a need here for greater transparency, greater disclosure.

These are, these are uh innovations that have happened in their markets, special purpose acquisition companies, but they're costly, and they may also have inherent conflicts between a promoter or sponsors. Taking generally about 20 of the offering that, if you raise a billion dollars, that's 200 million dollars. Can i repeat, the number 200 million dollars to basically raise money in a blank check type of shell company. And then you have two years to go out and try to buy something and there's also this conflict, that if you don't buy something you don't get the promoter, the sponsor doesn't get that 20 percent.

So there's an incentive to buy something, even if it's not the best person, all right, uh. Sorry, i can't i can't do much more of that um. You know a lot of that reminded me of one time i was on with charles payne and he asked me um he asked me: do i think that gary gensler and what he's gon na do is just lipstick service, and i don't know, i think when it Comes to just my personality in the way i'm wired i like to be a little combo of optimistic and realistic, and in that in that particular situation i was being more so optimistic. I was like no like.

I i'm hoping that he's at that position because he wants to better the markets around him, ensure the safety of everyone engaging in wall street, and i was like you know what i get that justice is slow, but i didn't quite know if it was lipstick service And i was like - ah i i hope not i was i was being optimistic and just with these comments, it's frustrating on this side of it, because the little bit that i do know about the market. A lot of this is just not it's not adding up; it doesn't foster any feeling of safety within the market or any, i guess not pride, but reliance on our regulators that they're doing the right thing and with the position that i'm at in this community, it Just makes it seem like we, we see these little moments in time where it feels like our voice is being heard and what we're calling out, but even right here, kramer was just saying he's like oh, like. I think this completely disproves the fact that there was a conspiracy what we still don't know about them, taking away the buy button, we still don't know how market makers were engaging with their sister company, who was a hedge fund. We don't know who was pressuring if there was any pressure to remove this.

We know from the report, as i was articulating earlier, that this was driven by retail, buying they stopped retail buying. We are always pitched this concept that we are engaging in a free market. It's not a free market if they, for whatever reason, which is what we're asking for they're like we all we want. Is that tell us what went wrong of why you can completely just blow up the demand side of supply and demand it? It makes no no sense to me and that's what we want so like there's parts where i'm like: yes, okay, they're, hearing our voice, they're hearing what we're going for and then there's comments from kramer right there.

Where he's like. Oh, we just proved there's not a conspiracy he's like well. I don't even think he could articulate to us what we think the quote-unquote conspiracy is, and maybe it's different from person to person, but i think a lot of people who have been truly paying attention and truly diving into this. It's the cronyism.

It's the big players. Having the other big players back - and i don't know, if they're necessary - necessarily their intent to be something along the lines of we want to screw over retail, i think their intent is to make their bottom line as high as they possibly can. And if that comes to the detriment of retail, well, that sucks um, there's so much more to this like we, this was not the natural flow of the market. I i like the market.

I have a passion for the market because to me it's a big mathematical puzzle that i enjoy messing around with, but right here when you're playing the game, you're learning a very complex game, a super super incredibly complex game, and it's one of these frustrating things where You're playing a sport and midway through the game, they change the rules um. I know that kramer had some stupid comments related to fantasy football. I have it written down here and start that i should talk about it. I mean that's silly like i find that personally offensive because he's acting as if we're just randomly up just gon na buy that and maybe maybe some people did but then there's many people like myself, who i mean i've dedicated 10 months of my life.

To this day, in and day out, the hours of content i put into this just being live, and then the hours before the hours after setting up interviews, doing research connecting the dots where i can. I'm just me and the sheer man hours that i put in and then you start multiplying that by maybe the couple other hundred thousand that take this as seriously as i can be like they put more time into their fantasy football. Where are you getting that stack? It it's it's derogatory that statistic like he. He doesn't know that he has no idea how much knowledge we have do.

I think that there are some people who have done no research and they just buy because they want to be in on it yeah sure, and then i think that there's people who have double triple quadrupled my own time who know this, like the back of their Hand so once again, we see this emphasis of mainstream media trying to belittle our effort, our intellect and our willingness to figure out what the system is and what's going on, and it they're trying to always act. They're always trying to take the argument that we're crying wolf and we just don't know what we're talking about and we're too stupid and we're the ones who somehow is inherently wrong. Look it. They called conspiracy, they're wrong about the conspiracy.

This report disproves it. How does the report disprove it? How how how how i showed you, i showed you that clearly, the short squeeze was not triggered. The gamma squeeze was not triggered. Retail was the one pushing it they stopped retail from buying.

20 thoughts on “Ep 108 retail traders are going bananas stocks, crypto sec report dumb money w/ matt”
  1. Avataaar/Circle Created with python_avatars Loi liang yang says:

    Looking at the rate of Bitcoin now I have Started investing my Bitcoin with Darkcyber_spy on Instagram he helped me invest my Bitcoin and now am earning every week

  2. Avataaar/Circle Created with python_avatars Robin Elise says:

    The Retail investor is not getting the best execution on the market .. In My Opinion the Sec is aware of the current status of what’s happening . Everything. Is Sequential, until the green light is given … Godspeed to all you apes ..

  3. Avataaar/Circle Created with python_avatars WabiSabi1111 says:

    To say it is not political is naive. I don't think you are naive, Matt, so why are you ignoring the real reason the GME squeeze got squashed. The current administration has corrupted every branch of the government as well as every level of law enforcement; do you trust the FBI or the CIA? The Washington elites will not let the hedge funds go down because they would go with them. They do not care about the middle-class. Think about this apparent reality- who gets hit hardest when gas prices go up and who benefits. Who made us dependent on foreign oil imports? It's only a matter of time before the market crashes. But I am all in on AMC because the shorts have not been covered. Thanks for your DD, and you are doing a great job simplifying the complexities in the markets.

  4. Avataaar/Circle Created with python_avatars Jit.Hackercena on telegram Young says:

    Successful πŸ’‘btc hacking service are πŸ’‘done by using I made over 2BTC SO FAR THANK YOU SIR🌷

  5. Avataaar/Circle Created with python_avatars Jit.Hackercena on telegram Young says:

    Successful πŸ’‘btc hacking service are πŸ’‘done by using I made over 2BTC SO FAR THANK YOU SIR🌷

  6. Avataaar/Circle Created with python_avatars shannon lopez says:


  7. Avataaar/Circle Created with python_avatars Brandon Balcer says:

    Does this not mean that gme was over 100% shorted and likely still is. As the shorts have not covered.. There was no squeeze!… yet! -per SEC

  8. Avataaar/Circle Created with python_avatars Frederick Miles says:

    Moving your shares to trusted brokerage is a start. I dont really do social media; but if I were you or one of your peers I would look at Citadel and Virtu's bankers: launch a social media boycott – literally have your followers move their cash and/or products from BofA to whomever in a public way. If you place pressure on the lenders this is how this ends or hope Gary wins his chess match. Think about how effective it is when you move shares to a more trusted brokerage – that same effect would have an amplified effect if retail transferred out of BofA. Literally create a hashtag and drive – BofA cannot take that kind of pain. I have no clue who Virtu's main banker is – given how dirty they are, I would guess HSBC? I dropped this same message to a few of the AMC/GME creators – its a straight forward way to place pressure on the lenders, build momentum, and empower retail to protect themselves from retail banking predators.

  9. Avataaar/Circle Created with python_avatars Crater Animator says:

    Hey Matt, I hope this doesn't come off as insensitive, but I left your channel for a few months back and just decided to check up on you again. I've noticed that you look physically stressed and tired, from when I used to tune in several months ago. If you can; take a chance to unplug, reset, get some sleep, and take care of that mental health. I know how stocks and be pretty addicting etc.. Take care my dude! Peace out, Thanks for the streams!

  10. Avataaar/Circle Created with python_avatars Penn Julliet says:

    Profiting $32,650 every two weeks, Mrs. Elizabeth A. Palmer has totally changed my life.

  11. Avataaar/Circle Created with python_avatars Steve D says:

    TXMD 10x lifting off!

  12. Avataaar/Circle Created with python_avatars Isaac Paul says:

    I'm no longer waiting for the stimulus check because I earn $22,000 every 14-16 day's recentlyπŸš€πŸš€πŸš€

  13. Avataaar/Circle Created with python_avatars Seashells & Dreams says:

    Dogelon is going Blalistic!!!

  14. Avataaar/Circle Created with python_avatars Seashells & Dreams says:

    F "N in Hegdies , such a rip off !!!!

  15. Avataaar/Circle Created with python_avatars Mario Perez says:

    Love from Ireland love from Twitter watch you everyday

  16. Avataaar/Circle Created with python_avatars Kourtney Fountain says:

    The intro song πŸ”₯πŸ”₯πŸ”₯

  17. Avataaar/Circle Created with python_avatars Timothy Hickcox says:

    Keep strong stay strong! Keep being the voice for us apes out there!

  18. Avataaar/Circle Created with python_avatars Micheal Moorer says:


  19. Avataaar/Circle Created with python_avatars snidely whiplash says:

    Word up MATT

  20. Avataaar/Circle Created with python_avatars Mekola White says:

    That intro song is so hottt

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