05-17-2013, 08:52 PM
Evaluating risk is hard because of straddles, spreads etc which means more than 1 option contract in a position, Then we have the market maker who has to take the other side of a trade whether theirs a natural or not. They can use naked shorting to balance their book though. I have always thought part of the outstanding short interest must be the market maker, I estimate 6 million of IOC's short interest is the market maker. I have never seen IOC short interest below 6 million. With additional float and derisking of the stock I expect the market makers short position to drop way down. My opinion.