>>93554A "short position" is when you borrow someone's share, sell it, and promise to buy it back and return it on certain date. If the stock price drops, you profit, and pocket the difference. Now, if
a lot of people(wielding a lot of money) think a stock price will go down, they might decide to "short" a stock. A lot of it. Like, say, 140% of the total stock available.
Here's the problem, if someone catches on to what that group is doing, they might start to buy that stock, forcing the price to go up. They might also forbid the lending of their shares to be shorted. This takes shares out of the market. A short seller, is contractually obligated to buy the share back. But if they have to come up with more shares than there physically exists on the market, they
have to buy it at
whatever price the sellers want. And the price usually increases ten-fold, but is potentially infinite. This is called a "short squeeze".
Here's where it gets interesting - if a short seller cannot come up with the cash to cover the price of the shares they owe, they are forcibly liquidated, and the rest of the burden is assumed by their insurer (usually, a bank), and they might get liquidated, too. Just a chunk of the financial system gone, just like that, because some retards on Reddit decided to HODL some Gamestop stonks. I forgot, but I think this exactly how Bear Stearns went down, before 2008.