The country witnessed an interesting standoff in the stock market last week, as a group of individual investors connected via social media banded together to take on large hedge funds by exploiting a quirk in the system. Although it appears the activity, which captured headlines and dominated discussions for several days, is unlikely to have an immediate impact on retirement investments, the long-term impacts of the situation are somewhat unclear.

So what happened?

Hedge funds short sell shares in companies that they believe will lose value in the near term, in order to make quick profits. They do this by borrowing shares at the current price, immediately selling them, then re-buying them after the stock price falls, allowing them to pocket the difference. While short selling can be profitable when it works, it is also risky because if the stock price goes up instead of down, they could incur dramatic losses. This is the dynamic that came into play last week.