NorthWest Biotherapeutics Inc (NWBO)

[Chiugray]

Eagle, I believe you are correct. The original question was related to synthetic short contracts and whether Retail investors are at risk. And I would say, no, not directly. Yes, indirectly (manipulation of stock price), only if the Market Maker shorts actual shares to hedge against these contracts/options.

Synthetic short contracts are private and between the Market Maker (who creates the customized contract of options, and may take the other side of it) and their institutional Client (e.g a short hedge fund).
- Note: this is very lucrative for MM to create the contract and even more so to take the other side.

Retail shareholders are not a party to that. They hold shares with their Brokerage firm, and that is a financial obligation purely between Retail and Brokerage.

The only danger is if Retail is dragged in indirectly when the MM takes the other side of these option bets and hedges against that by shorting actual shares.
- Scenario 1: This legal short sale uses the shares lent out from Retail margin accounts (often unknowingly). MM pays the interest expense for borrowing the shares.

- Scenario 2: If, as some suspect MMs are engaged in naked shorting for 5+ years, it is possibly done so to not want to pay expensive interest. They do not borrow shares, and instead use their MM exemption to execute the short sale, but then abuse the FTD close-out rule via kiting/rolling over the fail, ie creating “phantom shares”

Regardless of the scheme, Retail should be fine with their shares. The risk is not losing the shares, but the price suppression tactics. And IMO, the dynamics of all that gets blown up with DCVax-L approval.