Hertz Global Holdings Inc (HTZ)

[FatStrat]

Let’s say you borrow (short) 1000 shares of xyz currently priced at $5/share.

The stock goes down to $4/share and you think it won’t go any lower. You then buy 1000 shares to replace the 1000 shares that you borrowed.

It cost you $4000 to replace the $5000 worth of stock you borrowed. You keep the $1000 difference.

Stock instead goes to $6? You have to buy 1000 shares at $6 to replace (cover) the shares you borrowed at $5. You lost $1000. Goes to $7? You lose $2000...and so on.