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The thing I don’t get is, what if these guys get margin called in the middle of a big crisis? Don’t they get liquidated like everyone else?


They do get margin called. Usually they don’t do it for all of their assets, but only a portion needed to fund their lifestyles. In huge and persistent downturns there are always a few who get wiped out by this kind of risky behavior, though, if they aren’t well-diversified.




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