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Post by traderdennis on Dec 21, 2015 14:41:29 GMT -5
I understand the downward trajectory. Longs are despondent and either reluctant to buy when the price goes on sale, are fed up with the manipulation and losing hope, or are simply out of dry powder. I'm personally in the camp that's reluctant to go deeper regardless of how low the price goes - but I won't sell i still struggle to see how 120 million short shares, some of which may not actually exist, get reconciled without significant upward price movement. If someone would kindly explain the way to avoid this with option play, in a bit more detail, I'd appreciate it. I personally don't see how options can be used by shorts to 'escape' if things go well. Who would take the other side of the trade? Only dilution or outright failure will unwind this elegantly for the shorts. Enough people selling for tax losses and possibly an institution liquidating a position with those shorts covering. |
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Post by afrizzle on Dec 21, 2015 19:11:12 GMT -5
I personally don't see how options can be used by shorts to 'escape' if things go well. Who would take the other side of the trade? Only dilution or outright failure will unwind this elegantly for the shorts. Enough people selling for tax losses and possibly an institution liquidating a position with those shorts covering. But enough would have to equal one third of outstanding shares. If insiders have a little less than half and institutions have 1/3 where is that third coming from? (forgive the rounding please) |
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Post by beardawg on Dec 21, 2015 21:23:29 GMT -5
Pretty confusing. Many people claim that when shorts start covering, the pps goes up. Now it appears the pps goes down when they cover. What am I missing? If anyone can offer a brief explanation in laymen terms I'd appreciate it. Thanks. |
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Post by EveningOfTheDay on Dec 21, 2015 21:33:29 GMT -5
Some posters have often argued that calls will allow shorts to unwind their positions, but I have not seen yet the necessary math by which this would be possible. I think most of the volume we see is the same shares trading back and forth, back and forth. Mostly phantom volume. As I have stated before, (I fully agree with JPG here) only an outcome where bankruptcy or where longs start dumping their shares massively will allow for any shorts to cover. I do not think there are any other mathematically viable possibilities here. Covering for some of the shorts, sure. Covering of the oversized short position, simply no. I am very curious as to who will be left standing in this game of musical chairs.
On the other hand the longer we go without news and the further down shorts push the sp, the more long give up on the stock and more shares become available for covering. Perhaps that is the reason the sp is been pushed down at present so hard down. Comes January, either it will be clear that Sanofi is here to stay (which I firmly believe), or Sanofi might leave and there will be a massacre an easy way out for shorts. The unfortunate news for longs is that even ir it is clear Sanofi is sticking around, and even if the sp bounces a bit, it could potentially stay depressed for quite a while, as long as neither Mannkind or Sanofi are willing to share a bit more of their plans on how to make Afrezza a success, and as long as we do not get a good idea on how Mannkind will manage to stay afloat.
By the way, are there any longs in the board that have tried to buy large amounts of shares lately? Say several thousand. If so, were there any trouble having orders fill?
Thanks.
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Post by charleyd on Dec 21, 2015 21:53:10 GMT -5
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Post by EveningOfTheDay on Dec 21, 2015 21:54:35 GMT -5
It's felt like a crime scene for quite a while. Schwab interest rate said to be down to 12% now prntscr.com/9gfa46Please correct me if I am wrong, but borrowing rate goes up or down depending on how much demand to borrow there is. At present that demand has subsided considerably, as reflected from the dropping rate, but that does not mean any covering is going on. It simply means shorts are not pushing the price further at this point. Which reflects exactly what is happening. Maybe at some point they will push farther, maybe this is all they needed for longs to give up. SP is not coming up either because the short game has been played with such viciousness and effectiveness that, at present, there is no much interest in buying. There could possibly be, but without any news from the company most longs seem to be just waiting to see what happens. So the SP is not moving much and shorts do not need to keep adding to their position to keep the SP depressed. Borrowing rates drop, the SP stays low. If shorts were really covering upward pressure on the SP would be felt. We will have another report in a few days, and I expect some covering might have happened, but if any it will be fairly minor, IMO. |
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Post by EveningOfTheDay on Dec 21, 2015 21:56:11 GMT -5
I bought 10,000 shares this morning. Filled instantaneously. Thanks. Last week some were reporting a lot of trouble having their orders fill. I was just curious to see if this was still the case. |
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Post by suebeeee1 on Dec 22, 2015 0:49:37 GMT -5
I filled several thousand this afternoon. Went fishing for my price, but it was filled as Don as it was met. Three sellers are out there, unfortunately. |
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Post by alethea on Dec 22, 2015 10:36:24 GMT -5
It's felt like a crime scene for quite a while. Schwab interest rate said to be down to 12% now prntscr.com/9gfa46Please correct me if I am wrong, but borrowing rate goes up or down depending on how much demand to borrow there is. At present that demand has subsided considerably, as reflected from the dropping rate, but that does not mean any covering is going on. It simply means shorts are not pushing the price further at this point. Which reflects exactly what is happening. Maybe at some point they will push farther, maybe this is all they needed for longs to give up. SP is not coming up either because the short game has been played with such viciousness and effectiveness that, at present, there is no much interest in buying. There could possibly be, but without any news from the company most longs seem to be just waiting to see what happens. So the SP is not moving much and shorts do not need to keep adding to their position to keep the SP depressed. Borrowing rates drop, the SP stays low. If shorts were really covering upward pressure on the SP would be felt. We will have another report in a few days, and I expect some covering might have happened, but if any it will be fairly minor, IMO. Evening, I strongly believe your last two posts are absolutely "spot on" and accurately reflect what is happening with the stock price. MNKD's stock price has been battered into complete submission. Retail demand has been completely beaten down and yes, shorts are covering... albeit in tiny amounts. And yes, most of the volume we see each day is simply hedge funds, shorts and other big guys trading back and forth between themselves to create the illusion of significant volume. Don't anybody fall for it. I believe retail volume to be no more a few hundred thousand shares per day at most. |
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Post by bretzyboy on Dec 22, 2015 11:14:56 GMT -5
Earlier in this thread the question was raised as to if options could be used to unwind a short position. The answer is yes and it is not complicated to do so.
The question remains as to how much of this is going on. The answer to that is it is very difficult to know. To use call open interest and contract specific volume for the math might be possible, and it would welcomed if anyone has any insight into this. The open interest is posted as delayed information so if the buy, exercise and cover is performed simultaneously the delayed reported open interest would not indicate a change. The total contract volume might give a clue, but it isn't possible to know the relationship to short interest immediately.
The advantage to purchasing a call for short covering is in the fixed price via the strike. The disadvantages are there's a cost involved with the premium, and there have to be enough parties willing to create the contracts.
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Post by mnholdem on Dec 22, 2015 12:38:30 GMT -5
Reminder: The next NASDAQ Short Interest Report is scheduled to be released 4:30pm Christmas Eve. NASDAQ trading stops at 1pm.
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Post by jay1ajay1a on Dec 22, 2015 12:49:55 GMT -5
Some posters have often argued that calls will allow shorts to unwind their positions, but I have not seen yet the necessary math by which this would be possible. I think most of the volume we see is the same shares trading back and forth, back and forth. Mostly phantom volume. As I have stated before, (I fully agree with JPG here) only an outcome where bankruptcy or where longs start dumping their shares massively will allow for any shorts to cover. I do not think there are any other mathematically viable possibilities here. Covering for some of the shorts, sure. Covering of the oversized short position, simply no. I am very curious as to who will be left standing in this game of musical chairs. On the other hand the longer we go without news and the further down shorts push the sp, the more long give up on the stock and more shares become available for covering. Perhaps that is the reason the sp is been pushed down at present so hard down. Comes January, either it will be clear that Sanofi is here to stay (which I firmly believe), or Sanofi might leave and there will be a massacre an easy way out for shorts. The unfortunate news for longs is that even ir it is clear Sanofi is sticking around, and even if the sp bounces a bit, it could potentially stay depressed for quite a while, as long as neither Mannkind or Sanofi are willing to share a bit more of their plans on how to make Afrezza a success, and as long as we do not get a good idea on how Mannkind will manage to stay afloat. By the way, are there any longs in the board that have tried to buy large amounts of shares lately? Say several thousand. If so, were there any trouble having orders fill? Thanks. I did last week, 6,000 shares, I took five lots to fill it. |
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Post by Deleted on Dec 22, 2015 12:51:24 GMT -5
Earlier in this thread the question was raised as to if options could be used to unwind a short position. The answer is yes and it is not complicated to do so. The question remains as to how much of this is going on. The answer to that is it is very difficult to know. To use call open interest and contract specific volume for the math might be possible, and it would welcomed if anyone has any insight into this. The open interest is posted as delayed information so if the buy, exercise and cover is performed simultaneously the delayed reported open interest would not indicate a change. The total contract volume might give a clue, but it isn't possible to know the relationship to short interest immediately. The advantage to purchasing a call for short covering is in the fixed price via the strike. The disadvantages are there's a cost involved with the premium, and there have to be enough parties willing to create the contracts. Looking at my screen as I write this and common is trading at $1.54. 12-24 $1.00 call last traded at 0.61 and 12-14 $1.50 call traded at 0.05 so either way the calls at least in this example yield less $$ to me than just buying the shares. Aside from being able to buy enough shares on the open market to close out short position, any other reason in this situation to buy the calls? Why would they not save the calls (depending on expiration date) and either sell them or exercise them to buy should shares appreciate before expiration. I obviously do not buy or trade options. Comments appreciated. |
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Post by EveningOfTheDay on Dec 22, 2015 13:43:50 GMT -5
Earlier in this thread the question was raised as to if options could be used to unwind a short position. The answer is yes and it is not complicated to do so. The question remains as to how much of this is going on. The answer to that is it is very difficult to know. To use call open interest and contract specific volume for the math might be possible, and it would welcomed if anyone has any insight into this. The open interest is posted as delayed information so if the buy, exercise and cover is performed simultaneously the delayed reported open interest would not indicate a change. The total contract volume might give a clue, but it isn't possible to know the relationship to short interest immediately. The advantage to purchasing a call for short covering is in the fixed price via the strike. The disadvantages are there's a cost involved with the premium, and there have to be enough parties willing to create the contracts. I understand the mechanics of the theory, I just do not see how in this particular case, MNKD, it would be mathematically possible. It seems to me that shorts have created quite a large phantom supply of shares and that nor options by themselves or any other financial hedging will allow for them to fully cover. I assume it is a given some of the short position will be cover via options, some by directly buying shares, etc. Regardless, I still see quite a gap, so I will say it again. I have a strong suspicion, unless mathematically proven wrong, that the only way for shorts to fully cover their position, absent of a major secondary offering, is by having longs running for the fences or if MNKD simply goes bankrupt. |
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Post by alethea on Dec 22, 2015 14:25:24 GMT -5
Earlier in this thread the question was raised as to if options could be used to unwind a short position. The answer is yes and it is not complicated to do so. The question remains as to how much of this is going on. The answer to that is it is very difficult to know. To use call open interest and contract specific volume for the math might be possible, and it would welcomed if anyone has any insight into this. The open interest is posted as delayed information so if the buy, exercise and cover is performed simultaneously the delayed reported open interest would not indicate a change. The total contract volume might give a clue, but it isn't possible to know the relationship to short interest immediately. The advantage to purchasing a call for short covering is in the fixed price via the strike. The disadvantages are there's a cost involved with the premium, and there have to be enough parties willing to create the contracts. I understand the mechanics of the theory, I just do not see how in this particular case, MNKD, it would be mathematically possible. It seems to me that shorts have created quite a large phantom supply of shares and that nor options by themselves or any other financial hedging will allow for them to fully cover. I assume it is a given some of the short position will be cover via options, some by directly buying shares, etc. Regardless, I still see quite a gap, so I will say it again. I have a strong suspicion, unless mathematically proven wrong, that the only way for shorts to fully cover their position, absent of a major secondary offering, is by having longs running for the fences or if MNKD simply goes bankrupt. That's the point. It seems there will almost certainly be another dilutive issuance of new shares unless something wonderful happens, like a buyout or a low interest loan by Al, etc. What I don't get is why a guy like Al cannot get Bill Gates, Tim Cook, Steve Balmer etc. to invest in or loan MNKD some money. You'd think some bigshot somewhere would enjoy striking a blow to the crooks of Wall Street. |
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