Biggest disadvantage with shorting a stock!
With traditional share investment your risk is limited to the amount you spent on the initial purchase (a share price can’t go below zero). With short selling a trade isn’t closed until you buyback the original number of shares sold, so your risk is unlimited (there is not upper limit to how high a share price can go).
For example, in 2008 Volkswagen was involved in a massive short-squeeze.
Short sellers panicked because the share price was rising and they were losing money. To close their trades they needed to buyback the original number of shares they sold.
A "snowball" effect ensued with all short sellers trying to close their trades at the same time, driving the share price even higher.
The Volkswagen share price rose from €200 to over €1,000 in just over a month.
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