Geron Corp (GERN)

[Charleston]

Simplified- a short enters into a contract and borrows a share to sell it with an obligation to return the share in the future. If a short enters into the contract when the share price is $2, it would sell a share for $2 immediately. In the future if it's worth $4, they would need to purchase a share at $4 to cover/return. The gains are easy but at high risk due to the unlimited upside potential. Buyout news would exponentially skyrocket a price. If the shorter shorted 1000 shares of GERN at $2 and the price is $4, the short would initially make $2000 and buy those shares back later for $4000. Simply put, it's the reverse of purchasing a stock- you are selling it without actually owning it.