Exactly right. But, if the stock goes up to $150, then you have to buy it back at $150. The thing about short sales: the most the stock can go down is to zero,

Exactly right. But, if the stock goes up to $150, then you have to buy it back at $150. The thing about short sales: the most the stock can go down is to zero, but there’s no limit to how high it can rise. So, you have limited upside with unlimited downside. It’s also a leveraged position, since borrowing the stock is typically free and selling it generates cash. In the example above, you start with $0 and end up with $100 per share in cash and a corresponding $100 per share in debt. In theory, you can short an infinite amount of stock. In practice, you are limited by both margin requirements (debt to equity ratio), and the fact that the market would start moving lower to account for the sudden influx of stock for sale. However, even small moves in price can have a huge influence on the profit or loss of a short sale, since you can turn a small amount of cash into a large short position.