Short selling carries significant risks, including: 1. Unlimited Losses: Unlike a long position, where the maximum loss is the amount invested, short selling can result in unlimited losses because a stock’s price can theoretically rise indefinitely. 2. Margin Calls: If the price of the stock rises instead of falls, the broker may issue a margin call, requiring the investor to deposit additional funds to cover the loss. 3. Short Squeeze: If a stock's price begins to rise rapidly, short sellers might be forced to buy back shares to cover their positions, driving the price even higher.