Your ability to enter a sell order would not be impacted by your broker having loaned your shares.
A few years ago, a large brokerage (I think it was GS), would send a letter to their clients every day indicating how many shares of various securities were available to borrow. The short sellers would then use that letter as a "locate."
So if GS had 100,000 shares to loan, and five of their clients used that letter to satisfy a locate requirement, then 500,000 shares were shorted.
But no problem. If during the day GS was asked to loan shares, but they showed all the shares available that day were already loaned, all the broker had to do was hit the F2 key on their computer, and all the available shares at the start of the day would be restored. This went on for years.
The default setting when you open an account at your brokerage is as a margin account. You have to ask to have a cash account, which I did with TDA. No magic "buying power" shows up on my account. And my shares can't be loaned.
In a margin account, even if you did not use margin to buy your shares, those shares can be loaned. No money for you, but especially on hard to find shares, big money for the broker.
In another company in which I owned stock, a lender decided to sell the shares he was entitled to in lieu of repayment of his loan, after the sufficient time had passed. The TA advised the guy that the company did not have sufficient shares available. That's what happens when you're naked shorted. And yes, the TA was ultimately charged in that case. And the clearing firm, Penson Financial, was charged with naked shorting.
AI
Market Data 
Markets 
