Somebody has found an infinite money glitch in the market via /r/wallstreetbets #stocks #wallstreetbets #investing

Somebody has found an infinite money glitch in the market

Someone has found a vulnerability in the market and just blew a hole wide open in it. In the case of HKD, it has already ran 20,000% while OST and AMTD seem to be a little earlier in the cycle.

Conditions for the glitch to work:

In each case, these stocks have a very small number of shares outstanding, a locked up trading float and no options chain. This money glitch doesn’t work unless all three conditions are satisfied.

How the glitch works:

Once the float of the stock is locked (all free trading shares are accounted for and are ‘off the exchange’) the move can begin. The foreign ‘buyer’ begins to bombard the MM or the bookrunner with endless order flow. This can mean millions or tens of millions of shares of order flow coming in on the target stock. Generally, the bookrunner or MM can adjust the order flow strategically using FTDs, extending settlement dates, hedging using options, or flooding the order flow with short volume that can be transferred to a long position using call option blocks in the dark pool at a later date.

In these three cases and others like it, this is impossible. The option chain does not exist so there is no hedge against the order flow and short volumes can not be transferred into a long position using call options.

If the buyer is indeed foreign, then the foreign broker will demand delivery of shares and not accept FTDs from the bookrunner/MM. This is forced delivery, since foreign brokers are not allowed to accept FTDs or DTCC IOUs.

The buyer knows the float is locked and they are forcing the MM/bookrunner to deliver shares that do not exist. The MM/bookrunner HAS to purchase shares in the open market at any cost which is driving the price to insane highs ($1000+). The first of the three to run, HKD, briefly had a $500bn market cap today. OST traded 50x the open trading float today. In each case, there is no reasonable upperbound limit to price appreciation.

There will be fallout from this. Hopefully you are able to make a few bucks from this.

Good luck.

Submitted August 03, 2022 at 05:03AM by MainStreetBetz
via reddit