It’s unlimited because in the time he is holding cash there’s no limit to the amount the stock market could increase. If he sells a stock for $10, and then it goes from $10 to $10,000 he’ll only be able to buy back 1/1,000th of what he had. He lost $9,990.
It’s the same as writing call options. There’s defined upside and unlimited downside.
It’s the same as writing call options. There’s defined upside and unlimited downside.