I am still confused about the trade mechanics. Last time we spoke I asked you who will buy at the top and you said that the shorters will.

The top is the moment of maximum sell pressure by shorters who want to sell the token for maxium possible debt destruction potential.

At the top, everyone that bought at the bottom can attempt to 'force settle' rather than try to sell it alongside the shorters, that way they can realize their gains.

Who would buy at the top? Those who want a far greater size exit from Bitshares and don't mind waiting till next month for the same settlement price, or who can accept the maximum 28% feed price depreciation (say the asset you sold for hertz dropped more than 28%).

Who would short at the bottom? Potentially large scale shorters - try throwing up a several million dollar bitUSD sell wall and see how it affects the market, where as people will be jumping at the opportunity to realize the upcoming asset appreciation phases. Why would a shorter risk a 28% max debt appreciation? If they believe that they can make more than 28% in 2 weeks then it's worth it.

If that sequence is applied to hertz, then you create new hertz at the top, buy bitUSD with it, wait two weeks, buy hertz with bitUSD when it's at the low and return the hertz that you borrowed to the system.

Yeah, that sounds about right.

If you hold the asset (not the debt) you can force settle at any moment (bearing in mind the 720 min delay). If you have debt (you shorted the token) you must buy the token from someone else on the market before settling your debt, and if your collateral drops too far you'll be force settled.