but they’re not carrying a long position; they’re selling naked shorts and then the FTD’s for many of these shorts are off the charts. Days on end of failing to deliver shares
Market makers content to live with that exposure are speculators, not securities dealers. Specifically, they are speculators with Other People’s Money. They would be better off running a hedge fund in which all concerned are aware of the risks they’ve accepted. TBH, if the market maker is so adroit that he can survive doing business this way, he’s probably smart enough to figure out that a hedge fund manager, getting 20% of the profits instead of scalping pennies from the bid/ask, is what he ought to be.