I think the idea is that the Hedge Fund has to buy all of it at the current price and then it will immediately devalue and crash on them but return to the person they shorted.
The brokerage closes the position and the shares are bought at the last price. The hedge fund has 3 days to get the money in the account.
So if they manage 50B in assets and the bill is 70B. They need to find an extra 20B to balance the account to zero.
If it was me or you thats this happened to. It would be tough luck. You lost your money. Just erased. If you own your house and other assets. The banks would come after it all.
It should happen to them. This is the shit we should be doing to them. Of course, before making a mass grave.
Right, so if you were to short the stock in the right timeframe, couldn't you profit off of the inevitable drop?
Yes.
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