NorthWest Biotherapeutics Inc (NWBO)

[Chiugray]

Maverick, Ok. Here's my best attempt to decipher your deep riddle.

IF one is truly a studious market savvy observer you may notice especially in the last six months, the top 5 daily % Winners

Correlate that to Outstanding Shares
". ". ". # LEGAL Shares SHORT

Therein lies THE ANSWER
…
ALL based on firsthand direct professional experience & exposure with CEO of Pershing, now a part of Bank if NY Mellon
discussing Stock Loan Depts
DIFFERENT STROKES for DIFFERENT FOLKS

The simple answer:
- When the collateral (stocks) used in shorting NWBO goes down, the market maker’s collateral value declines. To reduce risk/offset, they buy back some NWBO shares, to lower their short exposure.
- So the Top 5 daily % winners refers to the collateral stock a market maker uses.

Example to illustrate:
- A client to MM wants to short NWBO shares but with little/no collateral and high leverage, so they use a synthetic derivative contract (options) to achieve this type of short exposure. To not have to directly borrow shares, they will pay high fees.

- The market maker (MM) creates this synthetic short position (customized for client) by selling this options contract to the client. The MM takes the opposite side (long) of this option (to earn the high fees, will hold the exposure).

- To hedge the risk they have in this synthetic short, the MM needs to short the actual underlying stock (NWBO shares) in the market.

- To legally not be naked, the MM borrows shares from brokerages (because retail accounts are margin accounts)

- However, to meet margin and collateral requirements, the MM uses shares of a large, liquid stock they own, say Merck as an example, to collateralize their borrowing (to short) NWBO shares.

- If Merck’s price drops (as it is one of the daily top 5% gainers/losers), the MM's collateral value declines, weakening the MM's position.

- To rebalance and reduce risk, the MM buys back some NWBO shares, lowering their short exposure, because their collateral backing has shrunk.