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The sudden surge in demand to buy shares of a stock can send the stock's price even higher. A high volume of investors who are shorting a stock and racing to exit their positions at the same time creates a short squeeze. (Unlike price declines, which are capped when the share price reaches $0, price hikes are theoretically limitless.) If a stock's price rises quickly, then short sellers sometimes scramble to close out their positions as rapidly as possible.
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If the shares of NoGood instead increase in price, then the short seller is at risk of losing a very large amount of money on the trade. They sold borrowed shares for $100, repurchased them for $70, returned the shares, and pocketed the difference. If the investor is correct and the share price has indeed declined, let's say to $70, then the investor will make $30 in profit. When that day comes, the investor needs to buy shares in the market to be able to return them to the lender. Of course, you can't simply sell what you don't own with no consequences - at some point, those borrowed shares have to be returned. are overvalued at their current share price of $100, then that investor can borrow someone else's shares of NoGood and immediately sell them to another buyer - again, for $100. Let's say an investor believes that shares of NoGood Co.