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Lumifer comments on Open thread, Aug. 10 - Aug. 16, 2015 - Less Wrong Discussion
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It doesn't have anything to do with connections or broker trust. It's standard operating practice for all broker clients.
If the price goes sufficiently up, you get a margin call. If you can't meet it, the broker buys the stock to cover using the money in your account without waiting for your consent. The broker has some risk if the stock gaps (that is, the price moves discontinuously, it jumps directly from, say, $20 to $40), but that's part of the risk the broker normally takes.
Another thing to watch out for when shorting stocks is dividends. If you are short a stock on the ex dividend date, then you have to pay the dividend on each share that you have shorted. However, as long as you keep margin calls and dividends in mind, short selling is a good technique (and an easy one) to play a stock that you are bearish on.
And, no, you don't need any special connections, although you typically need to request short-selling privileges on your brokerage account.
Another way to play a stock you are bearish on is buying put options. But put options are a lot harder to use effectively because (among other reasons) they become worthless on the expiration date.