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Comment by rippercushions | Hacker News Reader

And back up to 0.99 on Coinbase as I type this: https://pro.coinbase.com/trade/USDT-USD

Meanwhile, Alameda (SBF/FTX's trading arm) is apparently shorting Tether. https://twitter.com/mhonkasalo/status/1590665714490544128

Which is particularly interesting since they're known to be one of Tether's largest customers. The only rational explanation I can think of is that they think Tether is primed to tank, and they're trying to beat the rush to the exits like Goldman Sachs pouncing on Bear Sterns.

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Shorting tether can simply be a hedge against falling tether if you are holding large amounts. Doing that with stocks is completely normal and nothing to raise an eyebrow about.

I'd say it's more of an issue that they are still trading when potentially insolvent

Out of curiosity, why is shorting better in that situation rather than just selling part of what you're already holding?

I mean, why is being long $100k USDT and short $50k USDT at the same time better than just being long $50k USDT?

I don't have trading experience so this is not very intuitive to me.

Edit: oh, I think I get it. So if you were short $SOMETHING/$USDT then you're effectively long $USDT so if $USDT falls/crashes (i.e. loses its peg) even though $SOMETHING remains equally as valuable (as measured in other currencies), then you could lose a lot of money even though the underlying value of $SOMETHING hasn't really changed. So you could short $USDT/$USD to mitigate $USDT crashing when you're only interested in shorting $SOMETHING. I guess that makes sense?

sometimes you do this to delay tax events.

Large holders of Tether would be pretty dumb to short it, as they'd be shooting themselves in the foot. If Almeda indeed knows something the rest of the market doesn't, they would (assuming rational action) quietly be exiting their position.

depends on the payout if your short is better positioned than your holdings...you short. Like Deutsche did 2008.

They could do both, cut their losses by selling and selling high, buying low other people's Tether, depends on how much of their own holdings they can liquidate.

Did I count the zeroes right? How is a 250k short worthy of notice. It’s more like FTX still gambling using the last scoop of their customer’s money.

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