alt Hacker NewsYou can always hedge your shorts and limit your downside. It’s not a huge issue unless you have absolutely no idea what you are doing.
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anonymars • today at 6:29 PM
It seems like a prudent warning in a thread explaining the very basics of short selling
Also worth mentioning you might be on the hook to buy it back at any time; after all, the person you borrowed it from may themselves wish to sell it. If widespread, this is the basis of "short squeezes" (e.g. of GameStop fame/infamy), if a lot of short sellers are trying to buy it back at the same time
inigyou • today at 6:42 PM
Spoken like someone who's never actually done it. Hedging to limit max loss is extremely expensive.
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Does market closing and not trading continuously affects this?
If market opens at significantly different price, you may be forced to liquidate and loose more than expected.