4 ms·

This runs completely counter to my understanding of shorting and I just checked on my brokerage - there is no limit. The unbounded losses bit is the whole point

• chrisseaton 6y ago
  > Many short sellers place a stop order with their stockbroker after selling a stock short—an order to the brokerage to cover the position if the price of the stock should rise to a certain level. This is to limit the loss and avoid the problem of unlimited liability described above. In some cases, if the stock's price skyrockets, the stockbroker may decide to cover the short seller's position immediately and without his consent to guarantee that the short seller can make good on his debt of shares. https://en.wikipedia.org/wiki/Short_(finance)#Risks https://en.wikipedia.org/wiki/Short_(finance)#Risks Otherwise you'd make yourself liable for a literally unlimited sum of money. Any short could completely bankrupt your entire personal finances or your entire institution in that case.