They have been “covering” their short positions for three years now, kicking the can down the road. But like you say, it’s eventually going to blow when they can no longer cover, and are forced to close their positions.
I’m not super knowledgeable on this, but I’ve read about how they use their long holdings (in Apple, Nvidia, etc) as collateral to cover their shorts. When the market hits the looming correction/crash and the value of those Blue Chip stocks falls, they will no longer be valuable enough to be used as collateral.
They have been “covering” their short positions for three years now, kicking the can down the road. But like you say, it’s eventually going to blow when they can no longer cover, and are forced to close their positions.
I’m not super knowledgeable on this, but I’ve read about how they use their long holdings (in Apple, Nvidia, etc) as collateral to cover their shorts. When the market hits the looming correction/crash and the value of those Blue Chip stocks falls, they will no longer be valuable enough to be used as collateral.