Medinah Minerals (MDMN)

[Karl43]

I thought this post will help explain what is happening with those market makers that are short MDMN:

We’re coming up on an interesting phase in these battles wherein the net “open naked short position” can go up in a parabolic fashion due to the increase in the buying volume over the last 2 weeks. “Open naked short positions” grow by accretion. They go up month after month due to how the DTCC’s “Continuous Net Settlement” system (CNS) operates. When high levels of buying come in the knee-jerk reaction of the shorts is to naked short sell into it. They can’t let the share price go up much because after 12 years they need to collateralize these gigantic “open naked shot positions” on a daily marked to market fashion.

They know that all waves of buying will eventually come to an end and then they can “walk” the share price down methodically. The trouble for them is that once the volume and share price go up the “momentum players” show up for a “free ride”. Right now there are a gazillion momentum websites noting that Medinah seems to be “in play”. Because after 12 years of naked short selling the “open naked short position” gets so large that the crooks pretty much have to naked short sale into each buy order that appears. They don’t want to get a phone call from their clearing firm asking for a $10 million check. They don’t necessarily want to increase their short position but they’ve painted themselves into a corner and they have to put a “blanket” of naked short selling over the market.
Here’s their problem; once they decide to cover the first thing they have to do is to stop their day to day “maintenance” naked short selling which they do to minimize their daily marked to market collateralization requirements. The mere stopping of this makes the share price gap upwards especially if you’ve been pretty much the only seller for years (or a decade). Having to cover an astronomic naked short position in a market that is already gapping upwards could be difficult. The larger shareholders might anticipate receiving phone calls soon from the shorts