Thanks Vladimir -
One thing to keep in mind is that the goal, as I understand, is to combine a relatively large number (30 or more) of diverse algos and trade them in the 1337 Street Fund. So, even if a given algo needs a large short position in stock XYZ, if the 1337 Street Fund portfolio is truly diverse, it should be partially offset by long XYZ positions in other algos on any given day.
If I'm thinking about this correctly, a relevant and accurate model would need to include the fact that the algo would be combined with other algos in the 1337 Street Fund. It might not make sense to impose a model for shorting that ignores the end application of the algo; it will be combined with a large number of diverse algos, and it is the net result that really matters. So, for Q to write a model, it would need to have some assumptions in it about the diversification of the 1337 Street Fund, right?
In the context of the new arrangement with FactSet (see https://www.quantopian.com/posts/important-news-for-our-community), a model to be applied at the individual algo level would seem to be more important. I would think that the Quantopian Enterprise institutional users would need a better model for shorting.