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I wonder why sellers of Autocalls should cover the gamma ?

The autocall I'm talking about is of this type :

While the spot never goes below 70 % of the initial value, nothing happens. If it happens, then the payoff becomes a short put with strike 100 %.

The seller is never at risk, except from a marked to market point of view.

Are we talking about other payoffs ?

Thank you in advance !

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