Sulja Bros. Building Supplies, Ltd (SLJB)

[anderbest18]

your definition of shorting is actually very very much linked to naked shorting. Shorting by borrowing other people shares can pretty much be considered as naked shorting too when the market turns against you. Let me explain. They actually DONT borrow on an agreed basis because they dont ask permission to borrow. This person holding these ( his earlier bought ) shares always has the right at any period in time to sell his shares which are so called 'borrowed' at the time. The broker who borrowed these shares might have big problems to get these shares back when for instance the stock goes up and the legal owner sells them, so a logic consequence is that they suddenly are naked short (since there so called borrowed shares suddenly dissapeared, sold by the party they 'borrowed' from). This can inflict a chain reaction in shorting naked just in the hope they can drop the price to cover their positions at a lower price.

If you really want to use the correct terminology, you go short when you sell a stock you own, you go long when you buy. If you dont own the shares you are shorting naked, even borrowed shares are pretty much naked and especially when it is common practice in one stock. Just make the reflection, the borrowed shares that were sold got into somebody else portfolio. Assume another agent also borrows them and sells them, before you know it, the initial, lets say 100 shares are VERY naked. And this can go on and on...