Replies to post #796047 on NorthWest Biotherapeutics Inc (NWBO)

[Chiugray]

Barnstormer, Thanks for sharing that info. I just want to clarify something the AI said.

True: an institutional/hedge fund’s leverage is not “unlimited” and the market maker has a hard limit on leverage depending on the counterparty risk.

But: For a retail investor who thinks of leverage in terms of a standard 2:1 margin / leverage, that is an understatement. Technically "limited" could mean a practical leverage of 10X or 50X. We don’t know because it is a black box, where the actual leverage and margin deposit is a private negotiation between the client and the Market Maker.

My gut tells me that any hard limits are countered by a MMs risk appetite. But apparently generating derivative/synthetic contracts are very profitable. MMs make money on the creation of the synthetic contract (a set of put and call options) and a lot more money by assuming the risk by being on the other side of these contracts.

If using GME as an analogy: the exposure started off practically “unlimited” and becomes “limited” during the short squeeze by margin calls and collateral constraint mechanisms.

[kabunushi]

Thanks. I'm not that concerned about the mechanics. NW has such a low price and tiny amount in total $ worth of stock traded daily that in theory it could be easy to manipulate. I mean on slow trading days even say .5M extra shares sold for some days could keep the price moving down while needing only a tiny $ amount for a mid-size hedge fund. WRT naked shorting by private contract also, while constrained by collateral amounts and counter-party appitite for risk, a company with $400M of other assets could short 20M shares of NW and not get a margin call even if it ran over $1, for example, under a specialized contract for an off-market put agreement, assuming there is a counter party interested in selling them that put. But as far as shorting is concerned, obviously at the current price the returns are very diminished and I can only guess, but I seriously doubt there are any huge short positions. If, post MAA approval the pps runs to $1-2 we could see some big pocketed shorts more motivated to profit by shorting the pps and crushing it just by heavy volume shorting after longs have bid the price up. I have no idea how bold or aggressive any shorts would be against the backgrop of MAA approval when there might be some positive deal or even BO offer in the wings after approval is finally secured. I guess anybody willing to do that would have to have some sources of intel to tell them that there is no deal pending that could blow their short sky high.