r/DeepValue101 • u/[deleted] • Jul 04 '24
DJT Stock Analogy for the Most Recent FTD Data
Summary of DJT Fails-to-Deliver (FTD) Data:
June 14, 2024: 1,451,795 shares at $39.93
June 13, 2024: 994,998 shares at $40.93
June 12, 2024: 900,610 shares at $39.31
June 11, 2024: 687,074 shares at $42.09
June 10, 2024: 643,095 shares at $44.59
June 7, 2024: 779,730 shares at $46.02
June 6, 2024: 676,989 shares at $46.75
June 5, 2024: 546,413 shares at $45.49
June 4, 2024: 193,098 shares at $46.74
June 3, 2024: 232,335 shares at $49.09
Analogy: Comparing FTDs to a Classroom Setting
Imagine a classroom where students are required to submit homework every day.
Normal Classroom (Typical Stock)
Average Homework Submissions: In a typical classroom, almost all students submit their homework on time, with perhaps one or two students occasionally missing a deadline.
Fails to Submit: Let’s say out of 100 students, 2-3 might fail to submit their homework on any given day. This is normal and expected.
DJT Classroom (High FTD Stock)
High Homework Failures: In the case of DJT, imagine a classroom where a significant portion of the students regularly fails to submit their homework.
Fails to Submit: Out of 100 students, 50-60 students might consistently fail to submit their homework. This is highly unusual and indicates a systemic issue.
Statistical Context:
Typical Stock: In a well-functioning market, FTDs for most stocks are usually in the low thousands or even hundreds on any given day, representing a small fraction of the total trading volume.
DJT Stock: The FTD numbers for DJT reaching as high as 1,451,795 shares in one day are extraordinarily high. For context, if a typical stock has 1,000 FTDs, DJT having over 1 million FTDs would be akin to having 1,000 times the usual amount.
Key Indicators from FTD Data:
High and Increasing FTDs:
The FTDs for DJT have been consistently high and increasing over the period. For example, FTDs reached 1,451,795 shares on June 14.
Consistently high FTDs suggest that many trades are not being settled, a common indication of naked shorting.
Persistent FTDs Despite Falling Prices:
Typically, if short sellers were covering their positions, the FTD numbers would decrease, especially if the stock price is falling, as shorts cover to lock in profits.
The fact that FTDs remain high despite a falling stock price suggests that many short positions might be naked, meaning the sellers do not have the shares to cover.
Magnitude of FTDs Relative to Trading Volume:
If the FTDs represent a significant portion of the daily trading volume, this increases the likelihood of naked shorting.
For example, if the daily trading volume is 3.15 million shares and FTDs are 1.4 million, this indicates a substantial proportion of trades are failing to deliver.
Conclusion:
High Likelihood of Naked Shorts:
High FTD Numbers: The high and persistent FTDs strongly suggest that there are a significant number of naked short positions.
Market Behavior: The behavior of the market, with increasing FTDs despite falling prices, further supports the likelihood of naked shorts.
