> 50x leveraged short contract

This is partly why SEC wants underlying to be regulated.

What's stopping him from doing a similar thing by selling deep OOTM options off of money he borrows on his margin account at any other broker?

Deep out of the money options have optionality whereas BitMex contracts are delta 1 products. They have literally nothing in common. The relevant difference in this case is that the option caps your upside.

My point is that risky financial plays are still possible even in the SEC regulated market. Maybe I misunderstood the parent poster though.

As per SEC requirements, brokers are required to quiz you to makes sure you understand the risks involved in trading derivatives.

Furthermore, selling naked options (Level 3 access) without hedging or verticals requires certain capital and margin requirements, I do not think it is easily possible to get 50x levered in options alone - you'd probably need /ES futures for that.

The market can stay irrational longer than.. 10 mins.

Consider that your expensive lesson about the dangers of short-selling even when you're absolutely sure the price will go down.

Leverage and position sizing, not short selling. People with the exact opposite trade also got blown out today.

well you don't know how much he lost. It could have been say $1000. Evidentally, the contract was designed to trigger a closure of the position when it dropped out. At a 50x short, an "investment" of $1000 would have yielded $10k on today's turn of events.

I'm starting to feel that weird pump was some manipulation to "settle" both sides not to make "winners" from both sides by SEC's decision...

So you spun a roulette wheel and lost?

he lost even though it landed on the correct color.

> he lost even though it landed on the correct color.

On a later spin than the one he bet on. Which, you know, happens in roulette all the time.

No, that was another spin. He also gambled on the timing.

Seriously, who in their right mind takes out an option with such a short life?