I mean, it wasn't even FTX who bought the bankrupt position, but Alameda. (since Alameda was the backstop provider)
Bankrupt positions were usually sold for 1% under market price to backstops, so if mobile coin traded at 60 dollars and trader goes bankrupt, Alameda bought the position for 59.4 dollars per mobile coin (what a sweet deal!). The trade is done for trader. I am not convinced that if you go bankrupt, because you bought some GME at $120, you can go after the counter party who sold you GME at that price. (You can try, but it's some bad faith stuff).
This trade underlines again why the commodities exchange act is so vital to the whole country, and shows just how crappy FTX liquidation model is. [1]
Also, I really like trade because it's smart and funny.
Bankrupt positions were usually sold for 1% under market price to backstops, so if mobile coin traded at 60 dollars and trader goes bankrupt, Alameda bought the position for 59.4 dollars per mobile coin (what a sweet deal!). The trade is done for trader. I am not convinced that if you go bankrupt, because you bought some GME at $120, you can go after the counter party who sold you GME at that price. (You can try, but it's some bad faith stuff).
This trade underlines again why the commodities exchange act is so vital to the whole country, and shows just how crappy FTX liquidation model is. [1]
Also, I really like trade because it's smart and funny.
[1] CME Group CEO Terrence Duffy said it too! Here: https://youtu.be/V4SWraem1e0?t=2963