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by MichaelRo
896 days ago
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There are reasons for short selling and we'd be in stone age without it. Black-Scholes delta hedging (more fancy called "replication of theoretical option prices") relies on it. Shorting for Black-Scholes also has two facets: one where your loss is limited, when you buy a call then delta-hedge by shorting against it. And another one where the market is up to get you, selling a put and hedging by shorting. Works in theory but in practice you get funked and there's little to nothing you can do against it when it happens. I suspect most "betting against Tesla" shorters were actually institutional put sellers. Case when they weren't "betting" at all but hedging. |
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