I give you an example.
If you have $15000 and you short sell 100 SKF for $130, your leverage is about .8. At this stage, you have not yet borrowed any money. Now, finance crashes and SKF jumps to 200, you will be under the water, but you will not be wiped out (You may wait for an escape).
But if you short sell 200 shares, you will be on a leverage of $1.6. When SKF jumps to $200, you will be highly leveraged (over 2) and will be forced to cover your short positions at a big loss......55555555..... After you have covered for a loss, SKF may drop to 130 again within a few days.. Then, it will take you a few months to lick your wounds.
If you have $15000 and you short sell 100 SKF for $130, your leverage is about .8. At this stage, you have not yet borrowed any money. Now, finance crashes and SKF jumps to 200, you will be under the water, but you will not be wiped out (You may wait for an escape).
But if you short sell 200 shares, you will be on a leverage of $1.6. When SKF jumps to $200, you will be highly leveraged (over 2) and will be forced to cover your short positions at a big loss......55555555..... After you have covered for a loss, SKF may drop to 130 again within a few days.. Then, it will take you a few months to lick your wounds.