What is a Short Sell and Why Did the Trader Lose?
A short sell, or "shorting," means that the trader is betting on the decline of the asset's price, in this case, Ether (ETH). The trader sells the asset at a high price hoping to buy it back later at a lower price to make a profit. However, if the price rises instead of falling, the trader incurs losses and may be forced to close the position at a stop-loss point.
In the case of trader 0xCB92 on the Hyperliquid platform, he started the position by selling 50,000 ETH, achieving unrealized profits exceeding $26 million, but he decided not to close the position and instead doubled down by adding an additional 10,000 ETH, even though the price began to rise. This move increased the risk and ended with an actual loss of $716,000.
