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To: CapitalistHogg™ who wrote (8749)12/20/2006 12:34:23 PM
From: ahhahaRespond to of 24758
 
What I'm trying to figure out is how the HELL did somebody get the shares to short when the stock is hard to borrow!?

The case you're really trying to make is, "why does the SEC allow big guy clients of Morgan Joseph to go naked short, a transfer of money from the good Lil Guy speculators to evil Big Guys".

Do market makers get different rules?

Oh, no, I get it. You're trying to say that evil MMs go naked short which allows the transfer of money from good LiL Guy speculators.

Are they operating offshore (with different rules)?

Of course. Whatever you can imagine that demonstrates how evil everyone else is, must be true. There ought to be a law, and there will be, that punishes Lil Guys and makes Big Guys bigger. We big guys love how stupid all you Lil Guys are. We vote for 'crats to keep the pay offs coming.

I'm also trying to determine where risk is, in this reversal, with this company.

It's well known that stock price determines the efficacy of a company's product. The FDA charges a lot for its cooperation. Best source of funds for payoff is through secondary offerings.

Eternally looking for some way to get something for nothing...

Hardly, I've been trying to arb these binary set ups like NFLD for over three years without success (I've made lots of money on the binary events but never never without risk).

Hardly? No contradiction there, is there?

Binary event? An event to be distinguished from a ternary one.

I'm excited due to a recent breakthrough in understanding; and this is really the FIRST time I've actually seen it done in the marketplace.

You're excited to have confirmed your own myth.

As far as I can tell the reversal arb set up presented on your thread was PURE.

Morgan Joseph goes out to one of its institutional clients and tells them NFLD has a junk product. A "binary" event is coming with the announcement of P3 results, results which would almost surely going to be poor. They had been screaming for months that Polyheme was a loser. The institution figures that they can put together a levered short position with a priori hedge. Morgan Joseph helps them to assemble the position over weeks. Later, it is established that the institution was a shill for NFLD. Now that is purity, and it's what you always knew.

Meaning it was placed without time gaps and now it is going to make money no matter what happens to the stock price.

You don't know that. The P3 data could have been .3% better showing that the upper limit of the CI was above the 5.8% threshold. Then the stock would have gapped up and NFLD would win both on the product and the position. That's beyond PURE. SuperPure.

Somebody made thousands maybe hundreds of thousands doing this arb over and over again.

Then how was it "binary"? More to the point: you didn't make one red cent. You didn't because you couldn't make it pure. You would have made a killing had you bought a few puts, but no. You're too smart to have done that. It is well known that "smart" never takes risks.

Seriously, I'm looking for answers and I have run out of places to turn. I thought you could help because you seem to have expertise in finance.

I have helped you but you're too smart to see it. What you should do is go back and figure out why I have said what I did. You won't do that. Riskless requires never investigating. Purity requires avoiding getting dirty.