I wonder if this was a big part of why coinbase decided not to support BCH initially.
This really is an interesting situation. In the hours approaching the BCH fork an absolutely massive number of short positions were opened on various bitcoin exchanges, but the price remained steady. I assumed people were shorting in expectation of a crash, but the outlined scenario makes much more sense.
Similarly to the trade outlined in the article, if you already held bitcoin, you could short the equivalent amount and you would still receive bitcoin cash. This trade also had the nice side effect of your exposure to fiat currency staying flat through all the potential fluctuation.
Anyone who borrowed BTC may have implicitly borrowed BCH. Suppose Person A owns shares in OldCo. Person B borrows those shares and sells them short to Person C. OldCo spins out NewCo. On Thursday evening, you go to bed with 1 OldCo share in your account; Friday morning, you wake up with 1 OldCo share and 1 NewCo share.
Bought Person A and Person C own OldCo shares, and so expect to receive one NewCo share. The company provides one. Who provides the other? The short seller. Presumably by buying Person A's NewCo shares. Same thing happens with dividends.
So if you borrowed BTC pre-fork and returned it post-fork, you're may find yourself owing BCH. Shorting is complicated, which is why I'm bemused by its proliferation around a blockchain that doesn't even natively support lending or interest rates.
Interesting, in a short position you already sold the borrowed BTC, you aren't really holding the BTC. So you wont get 1 BCC out of it, only whoever you sold it to.
But whoever lent the BTC would most likely want the BTC + BCC they are entitled to, even though you don't really have one to give.
GADX is their trading platform. They don't plan on supporting trading with BCC. That being said, no, you don't own a short position. I don't see why that would even be related to this.
Because shorting means you're borrowing BTC so you can sell it off. Since you borrowed BTC, you're the one who would have received the BCC for that BTC, so are you on the hook to give that back as well?
If I borrow your hen and it lays an egg and that hatches a chick, shouldn't I give you the chick back with the hen?
https://www.bloomberg.com/view/articles/2017-08-02/bitcoin-e...
It's an interesting read even if you don't care about shorts or bitcoin at all.