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Short selling of stock involves borrowing shares that one doesn't own with the intention of repurchasing them at a lower price. Short selling of an option involves selling an option without having an equivalent position in the underlying security.
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Can someone explain the GME short squeeze situation to a non-stock trader?
Simply put: short sellers are betting a lot of money against the stock. If they lose that bet, someone has to win - the money has to go somewhere. As they cannot hold the bet forever, it is possible ( …