It's really akin to the LME trade halt fiasco, which then became even worse when they retroactively reversed trades. The point is, when they're about to lose money they'll change the rules of the game. If you don't recognize that then you're the sucker at the table.
The LME situation and the DTCC/meme stock situation have very little in common, besides both of them being triggered by extreme price movement. It's much easier to argue that LME was rigging the game, but commodities are a different market that hit a little closer to home when things go bad. If the LME let short hedges get vaporized, the idea that they should have been left out to dry would be very unpopular in the fallout of that situation. Maybe they should have, but you're going to have a hard time convincing people not involved in finance of that.
Unless you are an institutional trader, the market isn't out to get you specifically. You aren't even shit on their shoe. You're shit three counties over, if that. They barely think about you. They barely even know you exist. You're background noise that most large players need to filter out to find out who is actually on the other end of the trade. Financial markets are rigged in the sense that big players will be bailed out and cut loose no matter what. They are not rigged in the sense that a retail investor can be on the losing end of a trade because they didn't understand what's actually happening.
Yes, it's literally their job to account for situations like this. They failed. Pointing out how insane the situation was only points out how poorly they predicted what might happen with private information they still haven't shared publicly. If they can't account for the bets placed then we don't have functioning markets. They knew what the short interest was, they knew what the options chain was, they have data about trades the public can't even see. There were multiple traders pointing towards a potential short squeeze in GME going back well into 2020, so if they could see it why the fuck couldn't the DTCC?
Your stance is "their job was hard therefore it's not their fault." That's quite frankly batshit insane when we're talking about the stock market which is an enormous functioning part of our economy. Yeah man, I'm concerned they don't know what the fuck they're doing because they've already proven they don't. If they didn't care they wouldn't have changed the collateral requirements - you're contradicting reality with your argument.
You can have the last word, I'm not going to respond any further.
- A clearinghouse cannot halt a market
- A clearinghouse's job is to ensure that trades settle, which requires adjusting collateral, which is exactly what they did
- A clearinghouse does not honor a trade, the buyer and seller (via their brokerage) do; if there's an increased risk of the trade not being honored, the clearinghouse raises collateral requirements
- DTCC controlled the situation the best they could from their end by raising collateral requirements, which is basically all they can do
- A market can be functioning perfectly fine even if clearinghouse collateral is at 100%
- A clearinghouse doesn't definitionally know what the outstanding short interest is; short positions are on broker's books and it is the broker that reports that data to FINRA, not the clearinghouse
- A clearinghouse preemptively "dealing with" with all outstanding options positions (or any position, for that matter) that they (there is not just one clearinghouse) know about boils down to collecting 100% collateral
- The OCC clears options, the DTCC (by way of the NSCC) clears equity; the data that the DTCC has regarding options is presumably very limited
- A clearinghouse is not going to require 100% collateral because somebody on the internet believes there's going to be a short squeeze
- I don't exactly know what you think you think they "don't care" about, but if you're implying that a clearinghouse requiring high collateral to deal with brokers not being able to make good on a trade because of activity on that broker's books is somehow rigging the market, you've completely lost the plot
I think you misunderstand what a clearinghouse does.
Agree to disagree. Cheers.