A lot of Redditors hate the Reddit IPO | Reddit warned us that its users were a risk factor, and boy do they sound excited about shorting its stock.::Reddit seems like a likely candidate for a meme stock. But the actual reaction suggests that r/WallStreetBets isn’t going to send the stock to the moon.
Yeah, if there’s a “Superstonk” style event, the shares might jump to $1000 per share.
Say you shorted 100 shares. If you shorted it at $30, the absolute maximum you could make is just under $30 per share, or $3000. But, if it jumps to $1000 per share, you would lose $970 per share, and owe $97,000.
Maybe it’s not technically possible for there to be “no upper limit” to what you could lose, but you could easily lose many multiples of the maximum possible gain.