Very interesting, and thanks @jrcornel. I am just now hearing a chat between Tone Vays and Richard Heart where they get into the nitty-gritty of how short positions could be maintained.
The upshot seems to be that only the guys with enough underlying to hand over if their position blows up are reasonably protected from serious wipe-out when shorts go bad. The brokers are setting scary margins on short positions.
They seem to agree that some of the recent price run-up is from the Big Boys loading up on the protective collateral they want to have on hand when they go short.
You are making some interesting comments about puts. Is CBOE going to set up option trading?
Check out the Vays-Heart chat. One take-away for me is that most of the hedging will involve taking off-setting positions in related markets, rather than heavy-duty shorting of BTC.
Cheers!
BTW -- I am unable to stop marveling at these millionaires/billionaires in the game fighting hard as if the need to make money. Something has gone wrong with humanity, from where I sit.