If I'm a seller of a put option (sort of "price insurance") on the index, and want to hedge my exposure, then every time the price goes down, I have to short th

If I'm a seller of a put option (sort of "price insurance") on the index, and want to hedge my exposure, then every time the price goes down, I have to short the stock. Every time the price goes up, I have to buy the stock. This is largely seen as the cause of the 1987 stock market crash - a small correction caused portfolio insurers to start selling more, which made the market go down, which made them sell even more, etc. https://realmoney.thestreet.com/articles/10/21/2017/real-cause-crash-87 https://realmoney.thestreet.com/articles/10/21/2017/real-cau...