FFS..
This may be hard to follow as it deals with trading complexities.If you want further clarity suggest reading "More Money than God"...
Flash back to 2008...Bear Sterns and Lehman Bros..essentially investment banks are going down. They are mega investment banks and fall under the category.."Too Big to fail"...Bear is bailed out. Lehman is thrown to the wolves and triggers the stock market meltdown..The remaining "Too Bigs" are Goldman Sachs, Morgan Stanley, J.P. Morgan and Merill-Lynch..and some Commercial banks too deep in the sub prime..The distinction between these megaliths and the hedge funds is the hedge funds are not "Too big to fail" and no one is going to bail them out..
The big guys went to the government crying and blamed all their troubles on the short sellers...So the government for a time prohibited short selling and this killed most of the hedge funds...The reason being the strategy of most of them was not complex like "Renaissance"...But involved strategies like buying the S&P index and then selling puts which were not likely to be put unless the market crashed. Thus they could beat the S&P by 5%..Another common strategy was to buy corporate convertible notes, and hedging them by shorting the stock..This locked in profits because the notes pay interest..and the short sale made possession 'market neutral..When the government stopped short selling the hedge funds that were doing this hedge were put out of business..
In Amarin's case..most of the shorts everyone is talking about, or a large fraction of them is tied to the Jan 2012 convertible notes Amarin issued...So huge short squeezes are most likely not forth coming...
":>) JL
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