What about Bryan Caplan’s proposed strategy from https://www.econlib.org/archives/2009/08/how_to_stay_sol.html of repeatedly shorting with a smaller amount so you can gain in expectation even if you don’t know when the price will fall? Six days isn’t that long a time frame and the people with knowledge of the hack can make it prominent with blog posts if it takes more time than that. The real problem here was that they were wrong in thinking that it’d affect the price much in the end, not that they had to lock in collateral.
I think that you are right that in this case it probably had more to do with the fact that they were wrong about the effect on the price.
Regarding Bryan's strategy. This helps minimize losses, but it also limits the rate of return from the arbitrage. It is a matter of balancing the trade-off.
What about Bryan Caplan’s proposed strategy from https://www.econlib.org/archives/2009/08/how_to_stay_sol.html of repeatedly shorting with a smaller amount so you can gain in expectation even if you don’t know when the price will fall? Six days isn’t that long a time frame and the people with knowledge of the hack can make it prominent with blog posts if it takes more time than that. The real problem here was that they were wrong in thinking that it’d affect the price much in the end, not that they had to lock in collateral.
I think that you are right that in this case it probably had more to do with the fact that they were wrong about the effect on the price.
Regarding Bryan's strategy. This helps minimize losses, but it also limits the rate of return from the arbitrage. It is a matter of balancing the trade-off.