It's more like:
in the premarket hours, there were x number of long positions for shorters to reserve to borrow from MM's
you have to pick a price to reserve them at, based on how much of your money you intend to risk...but then that only dictates how many shares you reserve (you want to reserve them at the highest price you think they'll reach so you maximize your profit when they go down from there, without committing too much of your money by overestimating the high price)
next, you determine when you are sure it's going to go down and you execute the sale of those borrowed shares at the market price...when it goes down sufficiently, you buy the shares and give them back to the MM's (they don't care...they got their shares back with no difference to them) and pocket the difference
the issue is that if the Buy demand goes up because the price goes up, then the MM's are going to sell those shares you reserved and you automatically Cover at the Ask price...you get screwed if it goes up too far
