$AMC Entertainment (AMC.US)$ Correct me if i am wrong. i ha...
$AMC Entertainment (AMC.US)$ Correct me if i am wrong. i have seen a couple of youtuber mentioned all shorts have to be covered. however isnt that even if margin call happen, they shorted 100mil shares, the system wouldnt buy in 100mil shares. it will only buy back a specific amount till a point that the margin is within the threshold? and not every single shares?
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xxLittle Angelxx : correct me if I'm wrong .. most likely similar to your credit card.minimum payment ?
jimjimljm OP xxLittle Angelxx : that's what i think. unless the hedgefund is bone dry in terms of assets that will lead to a direct bankrupt. if not they could just like buy in 10 mil shares to stay within the threshold and continue interest payment?
xxLittle Angelxx : im also thinking that they are borrowing from B to return A , borrow from C to return B etc.. thus they can hold till today until the SI is too high for then.. maybe wrong..![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
jimjimljm OP : if hedgefund borrowed 1 mil shares and short it. in today's pricing, they would have cashflow of 58mil. it could have last them quite a while in interest payment with that money i think.
GoldSeeker : just hope they need to pay interest. If they no need to pay interest then good luck to us lol
JLtoTheMoon : when margin call, just means the account is no longer within the minimal threshold required.. so account holder needs to add funds to meet the minimal threshold, or assets in the account gets sold to meet it..
in short sell scenario, if it just bumps the price up until slightly at the margin call area then should be easy to top up or fund.. but if you were to consider the increasing price (or skyrocketing if you will), the account holder may not be able to fund the account in time which causes forced liquidation of its stock assets.
that's my view
RockinIT : If u are using one credit card to pay the min fees of another credit, and then using another one to pay for the next, what do u think will happen?
CherryPudding : Have to consider that their "threshold" possibly changes when they make a big loss while buying back the shares to return (no longer have the same power as before). Also if the "threshold" take reference from the ever increasing price during a squeeze... Guess things gonna get real nasty for them...