Only if the May contract drops in price after the roll.
Say UWTI sells the April contracts at an average price of $36 and buys the May contract at an average price of $38, soon after the roll the NAV of the fund is the same (they will hold fewer contracts at a higher price). Only when May contracts drops in price NAV will drop.

Having said that, roll happens over 5 days and when the ETNs start to roll, there is a lot of selling pressure on the April contracts early part of the week while ETNs still holding majority April contracts so next week Monday to Wednesday are likely to be red days.

32's on Monday when most of the WTI ETFs start to roll. They are net looooong. By Thursday I expect WTI April contracts to breach $30.

Today's trading was exactly the same as the trading on February 3rd. WTI rallied on a bearish EIA report. Next t 6 trading days were in read with WTI hitting $27 on February 11th, the same day USO roll was completed. Shorts were covered during liquidity created by the bearish report then fundamentals took over.

I think this calendar spread rollover will be done by this week.
Next week USO will start rolling their April contracts into May contracts so more selling pressure next week and also the spreads will naturally starting to narrow as time passes. I expect WTI April contracts to breach $30 by next Thursday.


When does UWTI start to roll? USO roll is March 7-11
http://www.unitedstatescommodityfunds.com/fund-details.php?fund=uso&pagetype=roll-dates&page=fund-details

Reasons?

Yes. If the EIA numbers are lower at 7million build, crude will rally on the bullish news that the build is less than what API reported.

No. Holding my Ds at a loss. Will get out next week Friday if WTI can't break down $30. I am confident we don't go north of $35 in the near future.

Short covering. Bad news creates the liquidity to cover. I think this is a calendar spread play to benefit from contango. Short the next month contract while covering the short on the current month contract. Rolling the short over.

12M financing done during Christmas was enough to last only 2 months. So this new 10M another 2 months or 60 days. So something needs to happen by that time. Otherwise, more dilution at depressed prices every 2 months.

Adam,

What is your take on how this financing will be treated under the most favored nations clauses in the Cognate agreements? Does this allow NWBO to issue additional shares to Cognate for the difference between $4 and $1.70?

Thanks.

Does anybody know how many more shares now needs to be issued to Cognate/Linda under the most favored nation clause? The Cognate restricted shares and payment conversations were at $4 per share with most favored nations clause. So, I think this financing will bring fully diluted OS count to more than 150 million with Cognate owning close to 70% of NWBO. What a sucker I am. No point selling my position now which is worth next to nothing. Just treat it as an option that does not have time decay.

Great article. A must read but a little hard to understand without some technical knowledge. summary: Oil going to $20 in the next couple of weeks because some won't be able to roll over Brent futures contracts and it will end up in the spot market.
http://seekingalpha.com/article/3937256-oil-big-long

When is the start of the next roll for UWTI?

$32.95 now. I predict below $32 tomorrow. DWTI around $270.

Does not look like. April contracts dropping in Asian trade. Close to $33 now. Likely end up close to $32 in the morning.

Electronic trading closes at 2PM. so that is the closing price for the futures. Then trading continues till 5pm under open outcry system so closing price at 5pm is different from closing price at 2 pm. This is similar to after hours trading.

Very funny. CLJ6 (April WTI Futures) closed at $31.96 on Friday (5PM open outcry close). It is now trading down at $31.83. All UWTI and DWTI contracts were already rolled into CLJ6 a week ago.

Your name is Agnes?

Thanks a lot TC. This is what I thought but wanted to confirm since I have no experience with shorting. So for anyone shorted at around $10, annual carrying cost of their position is not far off from the current pps. More this drags out, more they are going to bleed to death. I think some are slowly covering judging from the recent pps move, but float not enough to cover significant short positions.

Still I can't think how holding back the full enrollment news while raising capital at this distressed pps level makes any sense. Simple explanation is enrollment is close to completion but not complete.

Some Questions on NWBO stock borrowing costs

TC Trader or someone who knows how securities borrowing and shorting works;

1. What is the current borrowing cost/interest rate for NWBO shares to short?

2. Does the borrowing cost/interest rate fluctuate during the time it remained borrowed or is it fixed at the time of borrowing? i.e. if the borrowing costs go up, would people already shorted the stock pay the original rate or the new rate?

3. If someone shorted NWBO at a price of $10 and it is now trading at $2, borrowing cost/interest is based on the pps at the time of borrowing or does it vary based on current market value?

4. How often do they need to pay the interest? i.e. calculated daily or monthly?


Trying to determine if pushing the pps down further and further with constant bashing helps reduce carrying cost of the short position for people who are already short.

Could you explain why they would not have announced enrollment complete by now if this is the case? Should have been fully enrolled by November if this is the case. It would be foolish to not announce this and get the pps up prior to the Christmas gift we got (distress financing)

So why is Kat still waiting for the hold to lift?
https://www.facebook.com/katscure/

Looking forward to February 17th

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