How to Loan out shares on ASX??, page-26

No, however, stock loans are secured by posting collateral in the form of cash or other securities. As the stock price increases, the collateral required to support the value of the stock loan also increases... ie a margin call. If the borrower cannot supply additional collateral, then the short position must be covered and the securities returned. You sometimes see shorts get squeeezed out of their positions because they have insufficient assets to satisfy margin calls.

The value of the short position also gets larger as the stock price rises, and that can trigger things like risk limits for hedge funds that like to bet on things as well, which can push prices higher as they cover to take some risk off. Shorting definitely something for the sophisticated and highly attentive types.