Replies to post #7686 on Celsion Corporation (CLSN)

[Drano]

You can use a relatively small position to "walk" the price down (or in this case, bobsled it down the hill), so you lose a small amount of money on the position you use to take the price DOWN, but make a huge amount of money covering your shorts, and then when you buy at the bottom and make money on the way back up.

[TomLaf33]

I agree with Trond on this...and I was watching, the $2.5 $3 and $3.5 calls all trading. 9400 of the $2.5's and about 5000 from the other 2 series...so around $1.5M shares. Nobody is buying and then exercising and then smacking the stock out to trigger stop losses and/or somehow cover their short. $1.5M x 2.5 loss or so, so your down 3.5M and you supposively have a large short to cover. Doesn't make sense especially with double printing going on.

I think the calls from the other day were part of a warrant conversion, so the acct was already short, and bought the calls to cover.

I also believe the action yesterday was specific manipulation by a few short accts that knew there was a 300K stop order in the market makers books.

[badslinke]

9m+ was a typo, you are correct, it should be 9k+. That's what happens when you write a post at 3am after hours of research :)

But like Drano said, it only takes a few shares to walk the price down to start triggering stop losses. If you look at the NASDAQ trade by trade, a lot of the significant drops down (3 to 4 cents at a time) came from these ridiculously fast 100 share trades (HFTs no doubt). Somebody with a machine walked it right downwards, selling into low ball GTCs to trigger a cascade of waiting stop losses.

Yes, one would probably end up with a loss for the day using this strategy, but in the long run it will save/make a lot of money given the opportunity to flip a heavily short holding into a long one.

Also, if someone were just holding onto all those calls, the open interest would be near 10k. Last time I checked it was around 2k. Those calls got exercised.

This is all IMVHO, FWTFIW. There are definitely holes in the hypothesis (if you can even call it that, given it's not really testable), but I do believe it approximates what really happened.

B