I read a post by an investor short AOD who bragged about their large gains over the past few months, however was concerned about risk of owing .12 monthly dividend if share price rebounded. This would lead me to believe that any recovery in AOD will lead shorts to cover quickly especially prior to ex-dates that will push shares higher. Nestle, Nintendo, Pepsi, and other large blue chip names will rebound rapidly when global economic conditions improve and with no leverage AOD is set to perform very well.
Yes you are correct but with no leverage AOD can ride this out without margin problems which would force liquidations at the lows. I believe margin funds run the risk od dissappearing if we go significantly lower which is possible and probable. The market is not going to go to zero but a leveraged blue chip fund certainly could and many are close now.