This ZH article is worth the read time as it will remind you about the DTCC and its role in clearing stocks. Then drop below to the next headline and remind yourself of what you learned with our 2016 article on the EXCHANGES.
“Because the buyer does not know who the seller is, the brokers for both buyer & seller use a 3rd company called DTCC to actually match & “clear” stock transactions, moving title from selling broker to buying broker while ensuring proceeds are moved on time.
For equity options contracts (puts and calls), the primary clearing entity is OCC (Options Clearing Corp). I’m going to refer to “DTCC” below, but know that the same story can be told for options with OTC.
Clearing for US equities is generally a “T+2” process: settlement takes no more than 2 days from the trade. But the Buyer’s & Seller’s brokerage accounts generally reflect the transaction immediately – behind the scenes, there is lending. Lending means “counterparty credit risk.”
DTCC provides its balance sheet to guarantee settlement. But its balance sheet isn’t that big, so it has to tightly manage counterparty risk to guarantee accurate settlement.
In this way, DTCC is both a central repository for Title, and also the guarantor of Title.
This guarantee is typically an extremely low risk proposition.
However, “low risk” does not equal “no risk””
Students in the AIM School of Truth learned about these exchanges in a lesson plan of August 19, 2016. If you were not a student at that time, this is a must-read. If you need a refresher, by all means drop in and reboot.
Are You Ready to Be Ripped Off in the Biggest Financial Scam Ever?
We began the article: “You have heard that the stock market and Wall Street are nothing but a casino. “Outright gambling” you have heard or read. You may think you know what that means, but we urge you to read this article to see how deep we went to uncover the truth for Patriots.
Once you read this article, there is no going back to sleep. You will want to act to preserve your savings before the collapse happens. Our markets are no different than all that proceeded us in history: Fiat currency always ends the same way—total collapse. As we have told you before, we are not financial analysts and aren’t giving you financial advice. We are just outlining what our research discovered and are saying in a calm voice to our fellow Patriots, “Fire. There is a fire in the casino and you might want to cash out your chips and head to the exit door. Immediately.”
You probably have a sinking feeling in your stomach about what is happening in the global financial world. It doesn’t seem to make sense. You read that the U.S. stock market is hitting all-time highs, yet you hear that exchanges around the world are faltering. Why are we told that stocks are at record highs and volume in trading is strong, but that no one is buying? That just doesn’t make sense. Why are we hearing about the robust health of the “markets,” yet seeing more and more unemployment in our community?”
Then, read what one Wall Street trickster suggests that the WSB community should do to put the globalshits in a vice grip squeeze:
In a series of tweets on Friday, the iconic investor and “shark” compared the lending and rebate payment mechanism in stocks vs DeFi crypto tokens (where the bearer gets the benefit of the borrow fee and not the broker) and said – in an almost verbatim paraphrase of our “tricky” tweet from two days earlier – the following:
“one trick that I have been on both sides of is to lend out stock to shorts at a high APY and then call back my shares, which forces the short to cover. Now if #WSB did this en masse, it would be the mother of all short squeezes “.
But if they do, one trick that I have been on both sides of is to lend out stock to shorts at a high APY and then call back my shares, which forces the short to cover. Now if #WSB did this en masse, it would be the mother of all short squeezes . — Mark Cuban (@mcuban) January 29, 2021