So I get that you're selling first to buy it later. It seems like a zero sum game, based upon my intuition. Who is on the "other side" of that trade, what are they doing, and in what ways can it fall through in the event that someone's position on either side bankrupts them?
In the movie "the big short" for example the synthetic CDO (in my understanding) was the bulk of the "other side" of the credit default swap, which put them in a precarious position since their own parent firm had a massive position in CDOs and the firms who held the CDOs were going bankrupt, so they risked losing everything despite how insane their returns on their position was. I don't see where the "other side" of the plain old short sell is, and I would imagine its much simplifier than super complex instruments like CDOs and credit default swaps.
Submitted October 26, 2017 at 09:00AM by literallykreiger http://ift.tt/2iB75tG
