Yes 'having to cover' is a disadvantage, and something I wanted to remove from the system. That's why I am advocating no user-generated forced-settlements and only automatically forcing under-collateralized positions. That would make the market symmetric.
merivercap, I understand your desire, most traders just want to trade without being forced out of anything unless they fail to maintain collateral. Unfortunately somebody must
offer settlement in some form, either continuously or at an expiry, at a price near or at fair value, in order for any derivative to offer exposure matched to the underlying asset (a pegged asset is simply a form of derivative). All traditional derivatives have settlement, and there is no historical precedent for anything otherwise that I am aware of. I am not sure you accept this, and am happy to discuss my opinion further, perhaps outside this thread to not distract this discussion too far.
But assuming this is true, I think the desire you are expressing is:
i) for longs and shorts to simply be able to hold positions for as long as they like (i.e. no expiries), and
ii) be able to settle that against an intermediary rather than parties forcing the hand of opposing parties.
This is effectively what a CFD manager does when they offer a spread around fair value. To be able to do this, the CFD manager needs to absorb the difference between longs and shorts, and hedge their book of exposures in the external market. We could create something like this in bitShares. We would need a pool of users to act as a decentralised CFD manager and offer a spread around an external fair value, and be willing to hedge the long and short positions in the external market, using futures, ETFs or other available instruments. The pool would take income in the form of a market spread as we all as possibly a fee charged on the collateral of both longs and shorts. I would be interested to explore this concept further.
In the end I think bitShares could have many different classes of markets (currency, bonds, CFDs, ETFs, futures, options, shares, credit,...), each serving a different role for users, and each privatised. There is no need to think of all these things as competing ideas. They are complementary. There is simply no perfect solution that will meet all needs.
I've opened the possibility of an equivalent to ETFs in another thread, ideal for use as an investment vehicle. CFDs as above are ideal for leveraged trading, at a cost. Futures and options are ideal for managing exposures over a defined period.
We have all been so obsessed by trying to find the perfect solution to currency, that we are missing the fact we need customised solutions for different needs. We are banging our heads against each other in vain. Everyone's needs can be met, but not through the same vehicle.
As the OP infers without saying so, speculative traders should not be the party offering fungible non-expiring assets. This should be offered by parties willing to earn an income from making and supporting those markets. Speculators can have many other avenues to ply their trade as we develop them.