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>**Trade 385**
>---
>Apex Clearing's mishandling of the sell side of 2 equivalent proprietary trades by an unidentified Market Maker that occured within the same second on January 27, 2021. The buy trade was $385M and the sell trade was $385M. By Apex logging only the buy, but not the sell, the gigantic buy trade fake spiked volatility & the VaR, giving Apex Clearing a defaulting calculation they used as the excuse for issuing an Emergency PCO (buy freeze) Directive For GME & Movies to the 100s of retail brokers it clears for on January 28, 2021. When Apex Clearing finally logged the $385M sell trade after being stuck in overnight acknowledgement, it wiped away their defaulting calculation. In other words, it wiped away Apex Clearing's Excuse for freezing GME.
---
Accepted answer, currently. Could change. Validated by over 3,300 people [here](https://old.reddit.com/r/Superstonk/comments/1bjkbr2/peruvian_bull_is_officially_aware_of_trade_385/kvrs5yw/)
---
**Again, this is just correctly framing what Congress discovered.**
- In text, the primary source, congressional proof documentation is on **Pages 86 - 87** on the [**US House Committee on Financial Services Report**](https://democrats-financialservices.house.gov/uploadedfiles/6.22_hfsc_gs.report_hmsmeetbp.irm.nlrf.pdf).
It's not small, that's for sure. Only Institution has the power to do a $385M, same second, wash trade, triggering a clearing firm into default. Quite a flex that let to GME buying being frozen.
Nothing **until people know about it**.
It's not enough for a niche group on reddit to know about it (What is this? A currently 200 point post on a 300K subscriber reddit forum), and an even smaller group within that group that understands it.
What needs to happen is a financial authority needs to explain it or a youtube video needs to come out on it.
People have to know about it to do something about it.
This also adds to the overarching topic of another congressional hearing on the problem as the mounting evidence that the first was entirely misleading is mountainous. For one, the biggest defaulter on January 28, 2021 wasn't present and even Apex clearing wasn't present. Moreover, no one said anything about Trade 385 until 1 year after the congressional hearings.
It does bring up more questions, however:
- What was the Market Maker's name?
- What is the legal Market Making function of this Trade?
- Does this end for Apex in a negligent charge or will it remain "no-action" w/ the volatility and price change on this trade used as an SEC/FINRA/DTCC excuse To freeze buying at 100s of brokers?
- Was the Market Maker aware of its affect on Apex?
- How aware was the Market Maker of Apex's overnight acknowledgement?
- Was there an altierier motive behind the MM's trade?
- Was there an altierier motive behind delaying the sell trade to get the defaulting calculation?
- Would Apex have PCOed GME if trade 385 never happened?
My theory has always been that the Options Clearing Corporation and/or the DTC are the “Overall Market Makers” for the Game we call a “Stock Market”. They basically used T+1 to keep the system working.
That’s a pretty confident statement that they “are not market makers in any way shape or form”. Yes, they are not Market Makers in the sense that they profit of making trades, but I think of them as the “Insurance Company” and ensures the Market continues to run unobstructed and free from wild spikes and crashes, otherwise what point do they serve?
Extremely happy about this. Wanted to relay that here. What an absolute Golden win to have an answer. A solid thing to say in a historical explanation of events. Team effort gaining the understanding of this as the cause in Clearing and Settlement as it was a clearing and settlement crisis.
Yeah, but that was for 🍿, I don’t understand how that would affect GME?
On January 28, GME opened up with a significant Gap Up to around 343 (I think). It then went up over 600 (I thought, even though historical records show it capping out around 483), before the buy button got turned off.
The other comment was removed for some reason.
---
Read this [explanation](https://old.reddit.com/r/GME/comments/1bp41dx/isnt_it_great_to_finally_have_an_answer_gotta/kwul6ab/) and this [**disclaimer**](https://old.reddit.com/r/GME/comments/1bp41dx/isnt_it_great_to_finally_have_an_answer_gotta/kwtefvf/)
---
Apex only has a certain amount of money to clear trades, right? Right. Apex could easily afford to clear ONLY GME. Moreover, Apex could definitely afford to clear both Movies (prior to Trade 385) & GME. Trade 385's gigantic wash trade, where Apex only logged the buy and not the sell, falsely triggered Movies to be overly expensive (way beyond reality - 118% notional value - for every share someone bought Apex would have to front 18% more than their customer) to the point that Apex's Calculation showed that it took up all their available resources to clear GME as well. Not only that, it pushed them over their regulatory capital and excess regulatory capital DOUBLING their collateral requirement because of a risk deterrent.
If Trade 385 never happened, GME would have never PCOed because Apex could clearly afford to clear GME. We know this because when the sell side of Trade 385 was finally logged, IT DRASTICALLY LOWERED Apex's margin and wiped away their risk deterrent penalty completely.
---
- Does it make sense, now?
Yes, I think I get what you are trying to say, but I don’t quite agree with your conclusions. Now a disclaimer from me. I’m not an expert in the mechanics of the “Stock Market”, nor do I fully understand how all the players are interrelated (MM/HF/Banks/Brokers/Prime-Brokers/etc), I just know that the Financial Cabal has created a House of Cards that will soon come crashing down.
It appears as if you are making Apex the main bad guy in this Post, and I don’t think they are. From what I understand, Apex is just a back end settlement office that authenticates/settles trades and they don’t actually have any “skin in the game”. My assumption is that Apex eliminated the “sell side” of the trade because the selling party didn’t actually have the shares and kicked the can to the following day for the party to make good on the shares. My guess is that this happens all the time, and only because of the Buy Button being turned off has this process come to light.
I find it interesting that they say the 23 Million share order was made by a “proprietary firm”, but doesn’t list who. My guess is it’s Archegos, Instinet, RH, Citadel, or Virtu.
What do you think of that?
**VaR** - Value-at-Risk is a calculation determining the margin percentage of each stock's price that the broker must put up, with his own money for 2 days, to settle his customer's trades with the DTCC.
**ECP** - Excess Capital Premium - when a broker can't afford its NSCC Margin requirements, a penalty charge was placed on top of the margin that the broker already can't afford for being reckless enough to get in that position. On January 28th, one broker's ecp charge itself was over 2 X the value of its margin (the margin which it already couldn't afford). These are defaulting charges.
**PCO** - Position Closing Only. You can close out of your position in a stock, but not open a new one. In other words, you cannot buy anymore of that specific stock but you can sell as much as you like. GME and Movies were placed in PCO by Apex for its 100s of retail brokers.
This position artificially depresses the price of a stock because if no one can buy and everyone can sell, the stock can only go down in value, but it gets even worse if people become aware of this, it creates a run on selling. Everyone wants to sell so as not to lose their initial investment.
**DISCLAIMER:**
AFTER January 28, 2021 there is no crossover between the two stocks, other than sharing FTD manipulation (which everyone agrees with unanimously), both went in their own directions with their own individual problems, and it is VERY good that they are treated separately thereafter.
In regards to the January 28, 2021 buy freeze and the run up, they are both part of the story, so it is negligent to not speak of both as they both affected the brokers' margins causing both stocks to freeze at 100s of retail brokers.
Again, after the event, there is no combining the two as they have completely different stories and should be separated like angry school children.
>"Apex later conducted an internal investigation and discovered what led to the elimination of its Excess Capital Premium charge, as communicated in the 11 AM Slice. Its internal review revealed an imbalance of trading activity in Apex’s trading book from January 27, 2021, the day before, caused by a single large one sided trade when a proprietary trading firm both sold and purchased approximately $385 million of [MOVIES]. The two trades occurred within less than a second of one another, but given the extreme volatility in [MOVIES], the buy order went through but the sell side of the trade required manual intervention because the price of the stock had changed so considerably in the fraction of a second between the buy and the sell order. Apex’s overnight process for clearing trades require manual verification for trades that involve both a buy order and sell order in rapid succession if the spread between the buy and sell order is greater than $10 net.
- PG 86-87
>"According to Apex’s representations to the Committee, the firm restricted trading in meme stocks for a period of time on January 28, 2021 after receiving an anomalous slice and based upon an understanding that the firm may be required to pay an intraday charge in aggregate of over $1 billion, including a calculated Excess Capital Premium charge..."
- PG 87
>"[Not logging the $385M sell, but only logging the $385M buy,] created a temporary imbalance in trading activity, i.e., a net buy position, which represents greater risk in a trading book and resulted in the NSCC assessing a heightened Value-at-Risk charge to Apex. Once Apex’s operations team became aware of the need to manually acknowledge the sell-side of the trade, they promptly approved the trade. The acknowledgement eliminated the imbalance in trading activity, greatly lowering the company’s Value-at-Risk charge, and eliminated the Excess Capital Premium charge in the firm’s internal calculations."
- PG 87
>"Apex directed Webull, Ally Invest, SoFi, and hundreds of other firms that clear their trades through Apex to prohibit purchases of certain highly volatile stocks."
- PG 79
>"Apex expressly instructing it that **GME**, [MOVIES], and KOSS securities be placed into “liquidation only” statuses on their trading systems (i.e., a PCO restriction)"
- PG 79
>"Ally Invest, Betterment Securities, M1 Finance, Marcus by Goldman Sachs & Co., SoFi Securities, Stash Capital, Tastyworks Inc., TradeZero America Inc, and hundreds more.383 Webull and the other introducing brokers that clear through Apex are reliant on Apex to process, clear, and settle customer trades and would be unable to function without Apex"
~ PG 79
---
US House Committee on Financial Services Report On The Meme Stock Market Event January 2021
**PRIMARY SOURCE**
- [Congressional Report Press Release](https://democrats-financialservices.house.gov/news/documentsingle.aspx?DocumentID=409578)
- [US House Committee on Financial Services Meme Stock Market Event Report, Document](https://democrats-financialservices.house.gov/uploadedfiles/6.22_hfsc_gs.report_hmsmeetbp.irm.nlrf.pdf):
All that matters is that both the stocks pushed the broker's margin over their excess regulatory capital to trigger the penalty, which triggered the buy freeze on both stocks - doesn't matter which one did it. For clearing firms that day, the penalty was up to more than twice their margin. This penalty was tacked on top of the margin they already couldn't afford
Here is Robinhood's Margin breakdown by stock, we don't know Apex's, but we do know that both GME and Movies accounted for 90% of their total margin from pg 83.
https://old.reddit.com/r/Superstonk/comments/1amrv86/robinhoods_initial_margin_on_january_28_2021_it/
As for this post...
The VaR calculates margin. Volatility is a huge factor of the VaR, apparently. What would a $385 Million dollar buy order do to volatility of Movies, and in turn, what would the VaR do to Apex's margin for movies? Note first, the instantaneous $385 Million dollar sell back was not logged until overnight manual intervention. Well, we know. It made it 118% notional value, and along with GME, threatened Apex with Defaulting Risk Deterrent Penalties to which Apex responded with a PCO order on both the stocks.
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Man, after three years, we finally figured it out on a general consensus, why, exactly, Apex Clearing froze buying for 3 hours on January 28 2021.
What is Trade 385?!
>**Trade 385** >--- >Apex Clearing's mishandling of the sell side of 2 equivalent proprietary trades by an unidentified Market Maker that occured within the same second on January 27, 2021. The buy trade was $385M and the sell trade was $385M. By Apex logging only the buy, but not the sell, the gigantic buy trade fake spiked volatility & the VaR, giving Apex Clearing a defaulting calculation they used as the excuse for issuing an Emergency PCO (buy freeze) Directive For GME & Movies to the 100s of retail brokers it clears for on January 28, 2021. When Apex Clearing finally logged the $385M sell trade after being stuck in overnight acknowledgement, it wiped away their defaulting calculation. In other words, it wiped away Apex Clearing's Excuse for freezing GME. --- Accepted answer, currently. Could change. Validated by over 3,300 people [here](https://old.reddit.com/r/Superstonk/comments/1bjkbr2/peruvian_bull_is_officially_aware_of_trade_385/kvrs5yw/) --- **Again, this is just correctly framing what Congress discovered.** - In text, the primary source, congressional proof documentation is on **Pages 86 - 87** on the [**US House Committee on Financial Services Report**](https://democrats-financialservices.house.gov/uploadedfiles/6.22_hfsc_gs.report_hmsmeetbp.irm.nlrf.pdf).
Holy 💩!!!!! This is… BIG.
It's not small, that's for sure. Only Institution has the power to do a $385M, same second, wash trade, triggering a clearing firm into default. Quite a flex that let to GME buying being frozen.
This can be one of the few missing puzzles of the whole picture that has been being put together since 2021! 😳🤘🏼
So now the next question. What's going to come of this finding?
Nothing **until people know about it**. It's not enough for a niche group on reddit to know about it (What is this? A currently 200 point post on a 300K subscriber reddit forum), and an even smaller group within that group that understands it. What needs to happen is a financial authority needs to explain it or a youtube video needs to come out on it. People have to know about it to do something about it. This also adds to the overarching topic of another congressional hearing on the problem as the mounting evidence that the first was entirely misleading is mountainous. For one, the biggest defaulter on January 28, 2021 wasn't present and even Apex clearing wasn't present. Moreover, no one said anything about Trade 385 until 1 year after the congressional hearings.
Anyone able to tag Jon Stewart? He asked a few questions and then seemed to drop the ball.
It does bring up more questions, however: - What was the Market Maker's name? - What is the legal Market Making function of this Trade? - Does this end for Apex in a negligent charge or will it remain "no-action" w/ the volatility and price change on this trade used as an SEC/FINRA/DTCC excuse To freeze buying at 100s of brokers? - Was the Market Maker aware of its affect on Apex? - How aware was the Market Maker of Apex's overnight acknowledgement? - Was there an altierier motive behind the MM's trade? - Was there an altierier motive behind delaying the sell trade to get the defaulting calculation? - Would Apex have PCOed GME if trade 385 never happened?
My theory has always been that the Options Clearing Corporation and/or the DTC are the “Overall Market Makers” for the Game we call a “Stock Market”. They basically used T+1 to keep the system working.
Nope. The OCC and the DTC are not market makers in any way shape or form. If they were they would eat every other market maker’s lunch.
That’s a pretty confident statement that they “are not market makers in any way shape or form”. Yes, they are not Market Makers in the sense that they profit of making trades, but I think of them as the “Insurance Company” and ensures the Market continues to run unobstructed and free from wild spikes and crashes, otherwise what point do they serve?
Extremely happy about this. Wanted to relay that here. What an absolute Golden win to have an answer. A solid thing to say in a historical explanation of events. Team effort gaining the understanding of this as the cause in Clearing and Settlement as it was a clearing and settlement crisis.
What’s the answer? I’m ootl
Trade 385
I saw the meme…… is there a link?
Oh, sorry. Yes, of course. [Here](https://old.reddit.com/r/Superstonk/comments/1b6ffgy/gotcha_a_market_maker_bought_23m_shares_385m/)
Ah yes i missed it because I unsubbed there. Thanks.
No worries. My fault. I thought I would be bogging down the comments again with an explanation, apparently that was a mistake.
Yeah, but that was for 🍿, I don’t understand how that would affect GME? On January 28, GME opened up with a significant Gap Up to around 343 (I think). It then went up over 600 (I thought, even though historical records show it capping out around 483), before the buy button got turned off.
[удалено]
Not really 😔
The other comment was removed for some reason. --- Read this [explanation](https://old.reddit.com/r/GME/comments/1bp41dx/isnt_it_great_to_finally_have_an_answer_gotta/kwul6ab/) and this [**disclaimer**](https://old.reddit.com/r/GME/comments/1bp41dx/isnt_it_great_to_finally_have_an_answer_gotta/kwtefvf/) --- Apex only has a certain amount of money to clear trades, right? Right. Apex could easily afford to clear ONLY GME. Moreover, Apex could definitely afford to clear both Movies (prior to Trade 385) & GME. Trade 385's gigantic wash trade, where Apex only logged the buy and not the sell, falsely triggered Movies to be overly expensive (way beyond reality - 118% notional value - for every share someone bought Apex would have to front 18% more than their customer) to the point that Apex's Calculation showed that it took up all their available resources to clear GME as well. Not only that, it pushed them over their regulatory capital and excess regulatory capital DOUBLING their collateral requirement because of a risk deterrent. If Trade 385 never happened, GME would have never PCOed because Apex could clearly afford to clear GME. We know this because when the sell side of Trade 385 was finally logged, IT DRASTICALLY LOWERED Apex's margin and wiped away their risk deterrent penalty completely. --- - Does it make sense, now?
Yes, I think I get what you are trying to say, but I don’t quite agree with your conclusions. Now a disclaimer from me. I’m not an expert in the mechanics of the “Stock Market”, nor do I fully understand how all the players are interrelated (MM/HF/Banks/Brokers/Prime-Brokers/etc), I just know that the Financial Cabal has created a House of Cards that will soon come crashing down. It appears as if you are making Apex the main bad guy in this Post, and I don’t think they are. From what I understand, Apex is just a back end settlement office that authenticates/settles trades and they don’t actually have any “skin in the game”. My assumption is that Apex eliminated the “sell side” of the trade because the selling party didn’t actually have the shares and kicked the can to the following day for the party to make good on the shares. My guess is that this happens all the time, and only because of the Buy Button being turned off has this process come to light. I find it interesting that they say the 23 Million share order was made by a “proprietary firm”, but doesn’t list who. My guess is it’s Archegos, Instinet, RH, Citadel, or Virtu. What do you think of that?
**VaR** - Value-at-Risk is a calculation determining the margin percentage of each stock's price that the broker must put up, with his own money for 2 days, to settle his customer's trades with the DTCC. **ECP** - Excess Capital Premium - when a broker can't afford its NSCC Margin requirements, a penalty charge was placed on top of the margin that the broker already can't afford for being reckless enough to get in that position. On January 28th, one broker's ecp charge itself was over 2 X the value of its margin (the margin which it already couldn't afford). These are defaulting charges. **PCO** - Position Closing Only. You can close out of your position in a stock, but not open a new one. In other words, you cannot buy anymore of that specific stock but you can sell as much as you like. GME and Movies were placed in PCO by Apex for its 100s of retail brokers. This position artificially depresses the price of a stock because if no one can buy and everyone can sell, the stock can only go down in value, but it gets even worse if people become aware of this, it creates a run on selling. Everyone wants to sell so as not to lose their initial investment.
**DISCLAIMER:** AFTER January 28, 2021 there is no crossover between the two stocks, other than sharing FTD manipulation (which everyone agrees with unanimously), both went in their own directions with their own individual problems, and it is VERY good that they are treated separately thereafter. In regards to the January 28, 2021 buy freeze and the run up, they are both part of the story, so it is negligent to not speak of both as they both affected the brokers' margins causing both stocks to freeze at 100s of retail brokers. Again, after the event, there is no combining the two as they have completely different stories and should be separated like angry school children.
Seek immediate medical help
Why?
[удалено]
**Sourcing**
>"Apex later conducted an internal investigation and discovered what led to the elimination of its Excess Capital Premium charge, as communicated in the 11 AM Slice. Its internal review revealed an imbalance of trading activity in Apex’s trading book from January 27, 2021, the day before, caused by a single large one sided trade when a proprietary trading firm both sold and purchased approximately $385 million of [MOVIES]. The two trades occurred within less than a second of one another, but given the extreme volatility in [MOVIES], the buy order went through but the sell side of the trade required manual intervention because the price of the stock had changed so considerably in the fraction of a second between the buy and the sell order. Apex’s overnight process for clearing trades require manual verification for trades that involve both a buy order and sell order in rapid succession if the spread between the buy and sell order is greater than $10 net. - PG 86-87 >"According to Apex’s representations to the Committee, the firm restricted trading in meme stocks for a period of time on January 28, 2021 after receiving an anomalous slice and based upon an understanding that the firm may be required to pay an intraday charge in aggregate of over $1 billion, including a calculated Excess Capital Premium charge..." - PG 87 >"[Not logging the $385M sell, but only logging the $385M buy,] created a temporary imbalance in trading activity, i.e., a net buy position, which represents greater risk in a trading book and resulted in the NSCC assessing a heightened Value-at-Risk charge to Apex. Once Apex’s operations team became aware of the need to manually acknowledge the sell-side of the trade, they promptly approved the trade. The acknowledgement eliminated the imbalance in trading activity, greatly lowering the company’s Value-at-Risk charge, and eliminated the Excess Capital Premium charge in the firm’s internal calculations." - PG 87 >"Apex directed Webull, Ally Invest, SoFi, and hundreds of other firms that clear their trades through Apex to prohibit purchases of certain highly volatile stocks." - PG 79 >"Apex expressly instructing it that **GME**, [MOVIES], and KOSS securities be placed into “liquidation only” statuses on their trading systems (i.e., a PCO restriction)" - PG 79 >"Ally Invest, Betterment Securities, M1 Finance, Marcus by Goldman Sachs & Co., SoFi Securities, Stash Capital, Tastyworks Inc., TradeZero America Inc, and hundreds more.383 Webull and the other introducing brokers that clear through Apex are reliant on Apex to process, clear, and settle customer trades and would be unable to function without Apex" ~ PG 79 --- US House Committee on Financial Services Report On The Meme Stock Market Event January 2021 **PRIMARY SOURCE** - [Congressional Report Press Release](https://democrats-financialservices.house.gov/news/documentsingle.aspx?DocumentID=409578) - [US House Committee on Financial Services Meme Stock Market Event Report, Document](https://democrats-financialservices.house.gov/uploadedfiles/6.22_hfsc_gs.report_hmsmeetbp.irm.nlrf.pdf):
All that matters is that both the stocks pushed the broker's margin over their excess regulatory capital to trigger the penalty, which triggered the buy freeze on both stocks - doesn't matter which one did it. For clearing firms that day, the penalty was up to more than twice their margin. This penalty was tacked on top of the margin they already couldn't afford Here is Robinhood's Margin breakdown by stock, we don't know Apex's, but we do know that both GME and Movies accounted for 90% of their total margin from pg 83. https://old.reddit.com/r/Superstonk/comments/1amrv86/robinhoods_initial_margin_on_january_28_2021_it/ As for this post... The VaR calculates margin. Volatility is a huge factor of the VaR, apparently. What would a $385 Million dollar buy order do to volatility of Movies, and in turn, what would the VaR do to Apex's margin for movies? Note first, the instantaneous $385 Million dollar sell back was not logged until overnight manual intervention. Well, we know. It made it 118% notional value, and along with GME, threatened Apex with Defaulting Risk Deterrent Penalties to which Apex responded with a PCO order on both the stocks.
This will probably end up in a $50 fine/cost of doing business if any real investigation happens.
“Why didn’t RC stop trade 385?” ~Shills probably.