Theories: Margin call, FTD cycles and future share record dates.
Intro
So this is a theory, opinion, whatever you want to call it. Some data behind it are fundamentally flawed or don't exist so this shouldn't be looked at as a to-go-to DD. So, then, why post it at all?
I just want to post my own theory/belief behind what's going on with GameStop. I want to theorize, speculate, guestimate and extrapolate based on what very little data we all have available. Some parts of this post will contain from extrapolation from past data while others will be based on observation and/or data and/or extrapolation combined. A lot of this is based both on my own DD and others.
If you somehow accept this as the ultimate truth for GME... God have mercy on your soul. (Says me). Also i'm not a financial advisor and this is not financial advice, it's just my own theories on GME that i'm cultivating.
Here's the sub's rules on speculation, lies, spam, phishing, shills and fud.
I will not be replying to anyone who hasn't taken the above well in consideration before replying to this thread who's here to be toxic. To be clear, whilst this is all theoretical, it's based on some data, but that doesn't mean it's accurate.
Part 1 - Let's get into it: How this started
4 days ago i made this post that blew up. It was an extension/continuation of another OP's work whom i of course talked to for permission before taking this on. Somehow this piece of crap made it on the front page of reddit. Anyway...
The idea by the previous OP was basic and i kept it basic because it seems to work. I've had ideas to add other variables to it, but for the moment it still seems like that's perhaps not needed.
Feel free to build upon this theory if you like by the way. I won't be modifying it for the time being. If you think it's wrong (which it probably is), feel free to work on it on your own and correct it or do nothing at all.
Part 1 - Let's get into it: Some Charts and Data
**This is where the theoretical bullshit starts
Linear Margin Call Trigger Price
This is the theoretical price at which the singular entity (Not all the hedge funds out there) who's been manipulating GME and generally much of the market gets theoretically margin called or very close to being margin called. It goes -$4.80 dollars per day because they are bleeding.
Now being margin called isn't Game Over. You can meet your margin call or remain just under the margin call threshold by simply liquidating other long positions on let's say AMD, Tesla, Facebook, Apple etc. In a nutshell a market "sell-off" or market "correction" as it often is presented.
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Below is a data chart indicating the OHLC or Open, Low, High, Close prices of GME everyday for the past 6 months. Additionally, it has an extra column indicating the original OP's theoretical margin call line.
This extra column again is T.H.E.O.R.E.T.I.C.A.L and is an assumption on part of the original OP and myself that the entity behind GME shorting is bleeding money everyday.
The idea is that, what would happen if the price of GME touches this theoretical margin call line or goes past it?
***^(The only true way to know what the true line is, is to go and peek into the HF/MM books and tally up the shorts hence why we're all gathered here today to watch an idiot (me) attempt to crack this without that data. Read) ^(this) ^(on how the "formula" works.)
The idea here is that the purple line is Lava or you in high school. The GME High/Close price is that girl in high school that would not come anywhere near you. (*Falls asleep crying in fetal position*)
As we see here, that girl is having an averse reaction whenever you go near her.
The first time this happens is on January 28 (When the "gAmE eNdEd")
The other is on March 10 ($100 dollar price drop in 10 minutes).
From the 25'th of April onwards, we seemed to hit this "theoretical" margin call line and saw weird effects in the market like "Crashes" and other weird stuff.
From this point onwards, GME's price seems to start trending/following this theoretical margin call line. It is still inconclusive for me to say that this theoretical line is 100% factually being traced by the GME price as more day/data samples are required to ensure this is not a happy coincidence. In a week or so, if the price and line keep tracing each other very closely, then i'll consider this to not be a coincidence anymore.
One interesting pattern is that so far, except with 1 exception, we've always ended just below this theoretical margin call line. Even today we started all the way up from $162 and not only hit today's 146.79 limit, but also broke below it. I think i'm not crazy and that original OP was onto something here.
Additionally, here's all the above data in raw data format (It's fucking raw). I thought i'd continue the full Linear Margin Call Trigger Price line all the way to 0 zero to see on which date supposedly GME will be "gOiNg To 0". It's at the bottom.
Part 2 - FTD Cycles: The next cycle
*This is where more theoretical bullshit starts
^(** This one i'm gonna copy paste from my) ^(tradingview) ^(post because why write the same shit twice when you can copy paste it.)
^(***) ^(Here's a bunch of FTD stuff)^(. Make your own conclusions or don't.)
I believe i've refined the T+21 and T+35 FTD reset cycles down much better and i'm able to give you a better visualization of WHAT I THINK is happening. Obviously i can't prove any of this. No one can except the ones involved.
That having been said, i thought of starting to count the T+21 and T+35 cycles that Market Makers are allowed to leave an FTD in limbo until they decide to properly deliver and close it or reset it (e.g kick the can down the road) by borrowing shares from their buddies or buying deep ITM options. My use of the T+21 and T+35 cycles is extremely liberal and may not be even close to 100% accurate, so keep that in mind.
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In February - MarchI'm see that 2 days before T+21, there's movement. Usually it's up by quite a bit.I'm also seeing that between 6-10 days later just before T+35 hits, the price goes up again 1 more time.
I suspect that some family offices (not Citadel ) were covering here.
In March - MayI'm see that 2 days before T+21, there's movement. Usually the movement is DOWN, so it's a dip.I'm also seeing that between 6-10 days later just before T+35 hits, the price used to go up by a bit, but now on average it remains constant and doesn't move up or down by a significant amount.
Part 2 - FTD Cycles: What they might be doing
Based on what i see on this chart, i believe that in the T+21 period that happened yesterday 3 of May, they also shorted GME . We know this by the data from fintel, gme .crazyawesomecompany and other borrow info sites. Today they returned those borrowable shares which indicates they were done with their current T+21 shorting.
I believe that on T+21 there's bullish momentum from minor covering (because they can't fully cover at these prices) and they suppress the price by borrowing and shorting GME . With this theory and their borrowing habits, everything makes sense suddenly. (To me at least)
Additionally, right before T+35 (around T+25-30) they tend to do another minor round of tiny tiny covering which they also try to suppress but can't fully do so due to them having used all the borrowable shares they previously spent 1-2 weeks accumulating to short the T+21 cycle down. This is why right before every T+35 the price returns back to the price it was before they shorted T+21.
I've marked with a flag every important moment in time where there was GME momentum up or down. I also marked the points in the future that will have moment up or down based on the highlighted theoretical FTD reset cycles.
Important dates: May 14, May 24 and June 3. (Don't cry it's just a date)
Part 2 - FTD Cycles: Crazy theory (yep)
T+35 x 3 (Jan 28 to May 14)
I personally "want to" believe that May the 14'th is the day, simply because this day coincides 100% PERFECTLY with January 28'ths Mega Mega Mega huge amount of FTDs that were supposedly not closed, but only reset. How does it coincide with the 28'th of January? Well, From January 28 to May 14, the T+35 rule perfectly fits 3 times (105 days). Also on this date, we're 2 days before T+21 for the previous shorting period and if you've been reading, that means GME will move down or up due to minor covering or will go down because they'll short more. So it's a double whammy.
It's BOTH the next T+35 period where all of the accumulated FTD's from January are going to be reset and some are bound to leak through while they might purchase use Deep ITM calls to reset them, on the same day, they'll have the option to also cover the past T+21 shorts of approximately 750k-3mil shares borrowed. (Insert ruling about them no longer being able to do deep ITM call resets and them doing it anyway).
Sorry to pop your bubble, but this is a theory too. No one knows what will happen in the future and you'd be dumb to think i do.
EDIT: Fresh idea on this i've sorta been having for a few days but only now did it pop up again... This T+21 (really T+19) that's incoming on the 14'th of May is a day after the May 13 liquidity test.
I'll randomly throw the idea that today's general market dip was a really hard ass attempt to drop GME's price low enough to survive this liquidity test. This would mean that my "Margin Line" theory from Part 1 above is off by about +10-15 bucks (possibly extra liquidity they propped up from their Crypto shenanigan's)
Part 3 - Extrapolating future events using past data: Dividend, Split, Recall or something unknown.
In this DD i correctly extrapolated the share record date for the June 9 shareholder meeting as well as the shareholder proxy material availability date.
It wasn't hard, i didn't pull this one out of my arse, but i used a big range of past earnings dates and dividend dates (when GME had a dividend).
I counted the amount of days from one earnings date to the next as well as the dates dividends were announced, recorded and paid and found a simple repeating pattern that i then realized is how sites like tradingview or Nasdaq also extrapolate a future earnings dates.
I don't believe we will see a dividend or split. The conditions for these events aren't right and won't happen. I will regardless assume for the sake of the argument that IF there were ever to be any kind of event like a dividend/split (assuming a dividend just to explain the extrapolation method) that would require another share record date and/or announcement date, it can be extrapolated as follows...
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Wen Next Share Record-able (Dividends) event?
Let's find out / speculate when the shares are going to be recorded. Here's a chart of dates that show previous earning dates, dividend declaration dates, record dates and the final payment dates.
I've gone ahead and manually added the amount of days it took from "Declaration to Record" to occur as well as "Record to Payment" and also an "Earnings - Declaration" differentiator so you can see if dividends were announced before, during or after earnings and in what time difference.
The next Dividend Declaration Date (If there ever were to be one)
GameStop has declared dividends in the past equally on earnings, a few days before earnings or a few days after earnings.
- In 1/15 cases dividends were announced exactly on earnings,
- In 7/15 cases, dividends were announced 1-2 day after earnings
- In 1/15 cases, dividends were announced exactly 7 days after earnings.
- In 1/15 cases, dividends were announced exactly 7 days before earnings.
- In 3/15 cases, dividends were announced exactly 2 days before earnings.
- In 2/15 cases, dividends were announced between 3 to 4 days before earnings.
Because of the above stats based on previous GME earnings, let's assume that the next dividends will be announced 2 days after earnings. We're taking the most probably dates/days from above and extrapolating based on them.
- Assumption on Dividends: The next earnings date that will be as we know somewhere around the 9'th of June. The dividend is likely to be announced 2 days after earnings (shareholder meeting) on Friday the 11'th of June.
The next Dividend Record Date (If there ever were to be one)
Based on the chart i posted above we see that it typically it takes 14 days more (In rarer cases up to 19) to reach the share record date. For this case, we'll assume that the standard 14 days apply here and we'll use that.
- Assumed Dividend Declaration Date: Friday of June the 11'th.
- This would mean that the Dividend Record Date is: Friday 25'th of June. (Same day as Russel ETF reconstitution, happy coincidence)
xxxx GME hodler who's doing his own DD daily to be sure his investment is going to pay off.
Posted May 10, 2021, 10:20 PM UTC · edited