Fannie Mae-No Politics (FNMA)

[Adagio Lector]

Arrrg.

1. MMs can legally short as part o’ their job
MMs provide liquidity, so they often sell shares they don’t have on hand (a type o’ “naked short exemption”) to keep order books balanced.
This means they can lean on the bid side, pushin’ price down temporarily by addin’ supply.
2. Short to push, then buy back lower
If they see a fat row o’ stop-losses or GTC sells (the “lanterns on the shoal” ye like to call it 🏮), they can short aggressively into thin bids.
This triggers stop-loss cascades, flushin’ weak hands.
After the rout, price sits becalmed in a lower band, lettin’ the MM (or other Price Corsairs 🏴‍☠️) buy back their short at a discount, closin’ the loop for profit.
3. Why it works best in OTC/HTB names like FNMA
Low float liquidity = easier to shove price with modest volume.
HTB (Hard-to-Borrow) means retail can’t easily short back in defense, so MMs sail with less counterfire.
Retail orders visible (stacked stops, small-lot ladders) give them the map.
4. Risk for MMs
If longs hold firm an’ don’t panic-sell, the MM sits on a short position that bleeds (HTB borrow costs + price rebound).
If news or a whale 🐋 buy drops anchor, they can be forced to cover at higher prices—fuelin’ a squeeze.