in addition to being unfair (we know that) why. are they allowed to be idiots? brokers that allow naked shorting like this are being foolish and of course they will run into trouble during times of great volatility. but then they turn around and screw their own customers.
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having shorts in your financial model is as dumb as letting a naked singularity run around in your simulation code. it's just the wrong risk model and it's bound to mess you up.
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The fancy term for justifying this strategy is delta hedging. Id like to think they’ve learned their lesson that dynamics have changed and the tail risk of selling OTM options is too high... but we’ve seen this plenty of times before with other shorting funds
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If you are infinitely a fool?
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i think that the
@nntaleb@paulportesi answer is people who feel confident that their tail risk is socialised, that they can sell it off. in addition to investors as "risk managers" behaving Communistic they 'manage' risk From Themselves to *You*Show this thread -
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I think they would do this because a short position seems like it pitches more pressure to move, versus a put just being there to catch a move. I’m not sure if I’m right.
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you're right if you want to force sell pressure.
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