Replies to post #400818 on Anavex Life Sciences Corp (AVXL)

[ignatiusrielly35]

There is no way that the shorts are anywhere close to being fully hedged. Compare the 18m short shares to the open call option interest. Not even close. And that’s just the disclosed short shares. They are playing a dangerous game but they have lots of dough.

[falconer66a]

Will there be a squeeze?

Shorts are rarely retail newbies. They are professionals and are fully hedged.

Thank you for that perspective. Good to learn that the shorts will be Ok either way. Dinner table conversations will be congenial, no matter what.

Nonetheless, if the AVXL share price fails to sink, all short positions will have to be covered. The only way I know that can happen is by the buying of real shares on the market, by the holder of the short position, at market prices. Let me know if that's wrong. If it's correct, there will be lots of shares being chased by the shorts --- a short squeeze situation, correct?

Exactly, what is a "hedge?" How can that prevent necessary share purchases to cover the failed short position?

[Steady_T]

Hedge funds aren't always that smart. I read about H funds going under every so often.

GME took one or two out for example. My guess is that the biotech hedge funds play a basket of bio tech stocks, have some hedging of some sort. Although how they would hedge 18 million shares I don't know.