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Emile Snyder

@mattly @inthehands just for us less sophisticated readers, the reason shorting leads to unbounded risk is that...

I borrow X shares of stock with an agreement to return them at some specific future time. I then sell them at the current price. Then I wait for the price to go down. When I think it's bottomed out I buy them at the new price. If they only go up, I'm forced to pay an arbitrarily high price to return the shares at the end of the loan period?

Do I have that right?

Paul Cantrell

@esnyder @mattly
I’ll let Matthew weigh in on the details here, which I don’t know either, but yes that is the correct conclusion: you end up having to buy stock at whatever the price is, no matter how high, even if that puts you in personal debt.

Mar 20, 2025, 06:18 PM·Quiet public·Mona for Mac
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