Not if you use options. Let’s say you short a stock that is priced at $100 and you want to limit your upside risk. You can buy a call option that gives you the right but not the obligation to purchase a stock at a specific price.

One call option in the US equity market gives you the option to purchase 100 shares of the underlying stock at the strike price.

Let’s say you want to limit the downside (upside since we’re short) risk of your short position and you’ve sold 100 shares short at $100.

You can buy a call option with with a strike price of $110 that gives you the option to buy 100 shares of stock at $110 a share, which limits your upside risk to $1000 plus the cost of the option, which let’s say in this case it expires in 90 days and costs $300 or $3/share.

If 90 days pass and the stock a trading at $120/share, you will have an open short position showing a loss of $2000, but you can ‘exercise’ the call option to purchase 100 shares at $110/share which you return to the person you borrowed them from and closes out your short position with a $1000 loss, for a total loss of -$1300, including the $300 the option costs.

If it is trading at $80 a share after 90 days, you buy back the shares at $80 each and return them, closing out your short position with a $2000 gain, for a total gain of $1700 after subtracting the $300 cost of the option, which expires with a vale of $0 since the share price is under the strike price of the option.

You can hedge a long position with put options, it’s just the inverse of what I described. If you buy 100 shares of stock at $100/share while simultaneously buying a $100 strike put option, your downside risk is limited to the cost of the put option. If the put costs $500 (or $5/share) that is all you can ever lose as long as you exercise the put option to sell the stock for $100/share if the stock price is below $100 when the option expires.