Insiderman

Credit Default Swaps: The Show Isn't Over

Maybe part of the answer would be to require derivatives trades to match up, much like short sales are supposed to (within 13 days, anyway), with the underlying. Let's say there is one share left after all the puts and shorts are taken into consideration. Why does it somehow make sense to let someone buy/sell a put for 100 shares, 99 of which are already "net" gone?
I guess one of the big reason options models don't work all that well is that they fail to address demand/supply constraints.