Yeah that was half his scheme, which is unbounded as you say. The other half of the strategy, which the quote was about, was related to purchasing credit-defau

Yeah that was half his scheme, which is unbounded as you say. The other half of the strategy, which the quote was about, was related to purchasing credit-default swaps, which are derivatives like options. The losses on CDS contracts are bounded. But you're right... without knowing the balance between CDS contracts and short selling, it's hard to gauge how exposed he was.