When a trader purchases a stock, he will be losing only what he did pay to purchase the stock, because none of the stock price can fall below zero.

However, it should be noted that a stock price can increase by more than 100%, which refers to that a short seller will be exposed to unlimited loss theoretically.

As a measure to cover for the possibility that an investor can be wrong in his selling, where the stock price can probably go up rather than going down, he will have to deposit a guarantee money with his broker to make sure that the investor will be capable of covering (buying) the short position, if needed.