This is the question we get most often, and it arrives on the days when liquidation feeds are busy: what happens to you when a rally is destroying the people who are short?
The person who runs this account has been one of them. From the about page:
2021. A short of mine was caught in a sustained rally and liquidated. The position was right about direction and wrong about duration, which is the specific way this class of strategy fails.
Everything below is what got built afterwards, so it is worth being precise about what it does and does not protect against.
A short on a normal, dollar settled contract loses money in proportion to how far the price rises, and there is no natural stopping point. That is the shape that produces the liquidation screenshots.
The contract we use is inverse: each contract is a fixed amount of dollars of notional, and it is settled in coin. To close a short you buy back a fixed dollar amount, and the more expensive the coin becomes, the less coin that dollar amount costs. The loss therefore converges. However far the rally runs, a short of N contracts opened at price E cannot lose more than the coin it was worth at the moment it opened.
That is the whole of it, and it is arithmetic rather than a risk policy. The cover rule sits on top: the account never carries more short exposure than the coin standing behind it.
Measured on the live book on 20 August 2026, which carries four legs at close to full deployment:
The sum of the per leg bounds is 8.75 coins, against a stack of 7.34. So the bound exceeds the stack, and the honest version of the claim is not "no rally can liquidate this". Coin equity would reach zero if the price multiplied by 4.86 from here. The current ratio of equity to maintenance margin is 198.6 times.
The reason that multiple is not larger is the book, not the structure. Three of the four legs were opened above the market during the last two days, and one is a legacy leg carried at a price far below it. In the configuration this account is being steered towards, a single leg sized at 62 per cent of the stack, the bound is smaller than the stack by construction, and there is no price at which coin equity reaches zero at all.
So the correct summary is that the structure converts an unbounded risk into a bounded one, and then leaves the size of that bound as a thing to be chosen and measured rather than hoped about.
Two things, and we would rather write them down than be asked.
The first is time. A covered short in a rally is not in danger, it is parked. Our worst measured case sat still for 284 days, and that cost the use of the capital rather than the capital, which is a different problem with a different answer.
The second is the cover itself. All of the above holds while the coin stays behind the short. Anyone able to withdraw that coin turns a covered short into a naked one retroactively, with no line of code going wrong. That is the specific reason this account holds only its own coin, and it will keep doing so until the automatic reduction of a position whose collateral has left is written and tested.