8 ms·
Not unlimited. Your losses shorting a stock are capped at the price you borrowed it for (though technically it could be unlimited if you have to continue paying
by plouffy 7y ago
Not unlimited. Your losses shorting a stock are capped at the price you borrowed it for (though technically it could be unlimited if you have to continue paying borrowing costs if you can't buy a share and close out your short [1]).
[1] https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to-zero-isn-t-great-for-short-sellers https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to...
- toomuchtodo 7y agoThere is no limit to how high the price of an equity to go, which is where your unlimited liability comes from.
- SEJeff 7y agoI do wonder why you're being downvoted. Regarding a naked short, you're entirely correct in this ^
- peterbraden 7y agoWrong, you owe the stock, not the purchase price.