1000000000% You don't short and hold. Just short it. Cover, short it again. Keep doing it with crazy leverage and good money management.
When gold hit 870 during the first huge wave down that last for 3 or 4 days, I deduced that it could be the start of elliot wave theory... correction and there was an a + b + c mini-correction on its way down from 1030 to 870. I thought there would be a stronger B correction with (a + b + c) being the first A correction of larger scale. So I sold at 925 and then doubled down at 945 and have been short ever since, taking profits right after strong moves and rebuying with slightly larger sizes... still short and holding.
You have the idea in your head,and stated more clearly than bonecrusher (who mentioned it first). Could you make it formal (which is what I asked Bonecrusher to do)? mathematical equation that any guy can follow? We will see if someone does not become up with even better (I am giving a hint to what might follow). Pension_Admin: you are now the new holder of the throne.
You could short and cover a stock over and over for years up until the last building is liquidated. Some companies do take a long time to get to near zero. Your max. return is unlimited to point!
Risk 5% of capital. Maintain the same percentage as account grows. Make sure a good R/R blah blah blah.....the "holy grail" of trading.
the question was about a maximum percentage return on a short position not about a maximum cumulative return on N short positions.
The food seem to have made an immediate shot in your head. A have a lead/tie with the PA. I still need an equation. I will tell later how we can tie the break, if there is a need. But you deserve a lot of credit Bonecrusher.