Image source: StockSera
The number of “fails to deliver” for AMC Stock has once again risen. With Millions and millions of FTDs reported in November, there are more red flags being raised with this new data for November 2022 and more reasons AMC Stock investors are upset!
According to Wikipedia: In finance, a failure to deliver is the inability of a party to deliver a tradable asset or meet a contractual obligation. A typical example is the failure to deliver shares as part of a short transaction.
Things to note with failure to delivers (FTD) *Source Investopedia*
- Failure to deliver (FTD) refers to not being able to meet one’s trading obligations.
- In the case of buyers, it means not having the cash; in the case of sellers, it means not having the goods.
- The reckoning of these obligations occurs at trade settlement.
- Failure to deliver can occur in derivatives contracts or when selling short naked.
Traders and small-time investors generally pay close attention to failure-to-deliver statistics. Many investors have the suspicion that some businesses have been the victims of fraudulent short-selling techniques like naked shorting, which have negatively impacted the performance of their stocks. This is something that retail investors known as apes are watching closely.
A fail to deliver is a situation in which a seller is unable to deliver the securities that they have sold to a buyer by the settlement date. This can occur for a variety of reasons, including a lack of available securities, a mistake in the settlement process, or a failure to transfer the securities in time.
Fails to deliver are closely tied to the practice of naked shorting, which is the illegal sale of securities without first borrowing or arranging to borrow the securities. Naked shorting can create fails to deliver, as the seller is unable to deliver the securities that they have sold. This can drive down the price of the securities and potentially harm the company whose stock is being sold.
To address the issue of fails to deliver, regulators have implemented rules and regulations designed to prevent naked shorting and other forms of illegal stock sales. These include the “uptick rule,” which requires that a stock must be sold at a price above the previous trade before it can be sold short, and the “locate and close-out” rule, which requires that short sellers must have a reasonable belief that the securities can be borrowed before selling them short.
Overall, fails to deliver are closely tied to the practice of naked shorting, and regulators have put in place rules and regulations to prevent this illegal activity and protect the integrity of the stock market.
NOVEMBER FAILS TO DELIVERS
Below is a table from Stocksera.com showcasing the insane numbers of fails to deliver in November which have skyrocketed!
The November fails to deliver are once again on the higher end of what have been reported in the last few years, but until now it doesn’t seem like these numbers are raising red flags for the SEC or other in charge of trading.