Short into an earnings print you didn't choose
Asked at Citadel Securities, Susquehanna
You make markets in a single-name equity. Through the afternoon's flow you have drifted to a short position of 400 shares-equivalent in lots, and the company reports earnings 20 minutes after the close. Your desk limit is 500 lots, so you are technically inside it.
What do you do into the print, and why? Be concrete about the mechanics.
Your answer
This one is open-ended. Work it through, then check your reasoning against the full solution.