[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  TheUltimator5 [@TheUltimator5](/creator/twitter/TheUltimator5) on x 8948 followers Created: 2025-07-17 23:08:18 UTC Thoughts on the $GME XXX% convertible note offerings. They effectively increase the share count (temporarily) because the dealers are allowed to hedge the long bond positions by shorting the stock (per XX cfr XXXXXXX interpretations) Selling the bond will result in share buying, but the party buying the bonds want to hedge the bond position so they short sell the shares. This results in a qualified contingent trade (QCT) of a massive quantity hitting the tape each time this happens. This transfers short positions from party to party as long as the bonds are liquid. Since the note offerings were so big, there may not be enough velocity to keep transferring ownership, so another vessel is needed. Something like a single stock ETF or two... With these, institutions can simply short the derivative position, which uses swaps as the holdings, which then get hedged by dealers, effectively shorting the stock still, but through a roundabout chain of events. The more offerings we see, the more derivative products we will see magically pop up out of the blue. So who does this benefit? -It benefits GameStop because they receive payment now at a premium to invest how they see fit. -It benefits short sellers because it gives them the opportunity to exit (or hedge) their short position through the bonds, while dropping the price lower temporarily to put their positions in profit. -TBD if it benefits retail. It has definitely had a fundamental change in the way the price action plays out. We will see soon if it allows us to game the system by playing into the rotations. XXXXXX engagements  **Related Topics** [credit default swaps](/topic/credit-default-swaps) [stocks](/topic/stocks) [$gme](/topic/$gme) [stocks consumer cyclical](/topic/stocks-consumer-cyclical) [stocks bitcoin treasuries](/topic/stocks-bitcoin-treasuries) [$xwp](/topic/$xwp) [Post Link](https://x.com/TheUltimator5/status/1945983929686605855)
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TheUltimator5 @TheUltimator5 on x 8948 followers
Created: 2025-07-17 23:08:18 UTC
Thoughts on the $GME XXX% convertible note offerings.
They effectively increase the share count (temporarily) because the dealers are allowed to hedge the long bond positions by shorting the stock (per XX cfr XXXXXXX interpretations)
Selling the bond will result in share buying, but the party buying the bonds want to hedge the bond position so they short sell the shares. This results in a qualified contingent trade (QCT) of a massive quantity hitting the tape each time this happens. This transfers short positions from party to party as long as the bonds are liquid.
Since the note offerings were so big, there may not be enough velocity to keep transferring ownership, so another vessel is needed. Something like a single stock ETF or two...
With these, institutions can simply short the derivative position, which uses swaps as the holdings, which then get hedged by dealers, effectively shorting the stock still, but through a roundabout chain of events.
The more offerings we see, the more derivative products we will see magically pop up out of the blue.
So who does this benefit? -It benefits GameStop because they receive payment now at a premium to invest how they see fit.
-It benefits short sellers because it gives them the opportunity to exit (or hedge) their short position through the bonds, while dropping the price lower temporarily to put their positions in profit.
-TBD if it benefits retail. It has definitely had a fundamental change in the way the price action plays out. We will see soon if it allows us to game the system by playing into the rotations.
XXXXXX engagements
Related Topics credit default swaps stocks $gme stocks consumer cyclical stocks bitcoin treasuries $xwp