2008/7/7 Stephen Streater sbstreater@mac.com:
As for naked short selling, it is simply selling shares you don't have in your possession.
Strictly speaking, naked short selling means selling stock which you don't possess *AND* haven't arranged to borrow.
Sellling shares you don't have in your posession is simply a definition of short selling. The SEC's Regulation SHO requires broker-dealers to document the "locate" they have performed prior to selling the shares. This is the steps the broker-dealer must take to ensure that he will be able to borrow enough shares to fulfill the sale.