For the people who aren't shorting they can just hold it (indefinitely theoretically), but the people who are shorting it have contracts that will expire, thus they have to buy up more shares to counteract their shorted contracts?
The way shorting is done, is you borrow shares from someone who owns some, and then you sell it. You now have cash. Later, you can go and buy it from someone (for hopefully less than you sold it for) and return the share. You keep (or lose) the difference.
So yeah, if the long holders just keep holding, it'll keep going up and those that are short will owe more and more to their lenders (and paying more and more in interest, I think). Even if they want to cover their short, there's not enough shares to go around for them to buy. This is why it's being called an "infinite squeeze". They've shorted the stock more than there are actually shares out there, so it's difficult to cover.
There's some more factors at play when you consider option contracts, I think.
I don't see that's there's anything magical about 100%. In a short squeeze, the shorts buy stock on the open market at a high price and immediately return the stock. Some of this stock will find it's way back onto the open market. The shorter can buy that same stock a second time at a different price and immediately return it.
The real key is daily volume vs. volume shorted.
Shares outstanding - about 70M
Daily volume - about 24M
So if shorts were the only ones buying, it would take about 3 days of normal volume to unwind their positions.
But with the price going up, many others are competing with the short sellers to buy shares right now. So volume will go up and/or it will take longer to unwind.
Recently, the daily volume has gone up to 110M shares. A lot of those shares are being bought and sold more than once per day.
There's nothing magical about 100% of outstanding shares.
But it's a huge problem that the shorts outstanding are so high relative to daily volume.
Options can be used to create a position that behaves like a short, except without the cash being deposited and without having to pay interest on borrowed shares. Sell a call and buy a put with the same strike, and choose the strike so that the call premium equals the put premium.
selling a naked call requires quite a lot of margin, and akin to short selling stock - the downside is unlimited. Your option just doesn't go to zero, it starts at a negative value (what you got for selling a call) and can go to either zero and you get to keep that tiny premium or rip your face off when things like gamestop happen.
People have already forgotten Optionsellers.com it seems
The same is true of short selling. Like I said, short call/long put is equivalent to a short sale (of 100 shares). How much margin is required depends on the type of margin account an investor has and what their other positions are (for some account types).
