A short seller borrows shares, sells them and has to buy them back later. In a short squeeze, a rising price makes short sellers buy, and that buying pushes the price higher still.
What the film says
In hedge funds, betting against a stock can force you to buy it. It's called a short squeeze. To bet against a stock, a fund borrows shares, and sells them at twenty dollars. The plan: buy them back at ten, and return them. But the price goes up instead. Thirty. Forty. Those shares have to come back, so the fund buys. So does every other short seller. And all that buying pushes the price higher. Which can force more buying. That's the squeeze. Sold at twenty, bought at forty. A twenty dollar loss, per share. So why do investors care? A stock can only fall to zero. There's no fixed limit on the way up. The way out is the same door for everyone.
A simple example with round numbers, not advice. Terms vary by fund.
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