Viewing a single comment thread. View all comments

infected_scab t1_j6j1zl1 wrote

Reply to comment by BedContent9320 in Bulls: Shut up and take my money!! by CrackCody

The Big Short is about short selling hedge fund managers.

16

benji3k t1_j6jtg8p wrote

After reading the book recently it appears the product they used is more like buying calls on an inverse ETF except it either paid all or nothing to them with no strike price per say , not them actually doing the short selling. But I'm probably wrong honestly I'm regarded and can't read.

4

m1t0chondria t1_j6krftl wrote

It’s a completely separate class of instruments, but yes with very loose analogy there were multiple all or nothing DOOM-like instruments out there that were wildly mispriced because the fees looked so damn good if you didn’t understand the model and especially the underlying assumption of statistical independence in underlying assets, which wasn’t true.

2