Naked short and Short selling a stock are two different peas in a pod
Short sell a stock, you need to sell shares in hopes the price goes down and buy it back at where ever bottom is and ride it up. Sometimes, they do not cover because the company goes BK or out of business or both.
Naked Short selling is almost the same but the Shorting MM, is supposedly borrowing shares from another MM and shorts the stock, but shorts the stock without actual shares being borrowed, "air" shares.
This is illegal. If the price rises and cannot produce the "borrowed" shares, he must pay for the difference and depending upon how many was shorted, could go out of business. I've seen that happen years ago.
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