Replies to post #467380 on NorthWest Biotherapeutics Inc (NWBO)

[Magrit]

Yes. Here is part of an article discussing shorting stocks:

If the stock goes down after the sale of the 1,000 shares at $50—say to $45—then $5,000 is moved from the broker's account to the short seller's account, which can be removed by the short seller. His margin requirement goes down by 50% of the $5,000. On the other hand, if the stock goes up to $55, then $5,000 is moved from the short seller's margin account to the broker's account and the short seller's minimum maintenance requirement will increase.

These money transfers take place exactly the same way whether you do a regular short sale or a naked short sale. There are similar future transfers if you have sold calls or sold single stock futures. When you buy puts and fully pay for them, there are none of these money transfers after the purchase, although the value of your account certainly fluctuates as the value of the puts fluctuates.

https://www.investopedia.com/articles/optioninvestor/09/naked-short-selling.asp

My understanding is the only time they are not required to pay is if they can bankrupt a company.

Margaret

[jdheart101]

Yes

[CherryTree1]

Short sellers borrow stock, sell it with the expectation that the stock price will drop so they can buy it back at a lower price so they can return the borrowed stock. The difference between the price they sold the shares and bought back is their profit.
For example lets say the borrow and sell 10,000 shares for $500. The price drops and they buy it back for $400 so the difference is $100 and their profit is $100 X 10,000 = $1,000,000.
Naked shorting is selling shares that you never borrowed so when the entity you sold them to needs the shares because the want to sell them or perhaps NWBO gets bought our so they need to surrender the shares their are no shares to give them so it is a Fail to Deliver. I imagine they can go for long periods of time without having to produce shares but I suspect that when the price starts to rocket higher and it looks like it is going to remain much higher you may have buyers wanting their shares if there are none it is a Fail To Deliver.

. . .. SO that is my understanding baparks but I am an engineer not a financial specialist so I encourage anyone with expertise in this area to correct me.