How is it possible? I thought you can only lose what you put in. So 100% max. But I’ve seen news and posts about how people lose much more than that.
In: 18
If you purchase a stock that is the maximum you can lose. That is put it as what you paid that might include fees to a broker.
If you, on the other hand, short a stock you can in theory loos an unlimited amount.
A bit simplified is short when you sell a stock today that you do not own and you then purchase it tomorrow. That means it the stock goes down in value you make money. The problem if it increases in value you need to pay that tomorrow.
So if the stock value is 10 today and you shot sell 10 stock you get 10 x 10= 100. But if it tomorrow increase to 30 instead of dropping you need to pay 30 x 10 = 300. So you loos 200
https://en.wikipedia.org/wiki/Short_(finance)
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