In an ABUSIVE naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling
In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price).
What BS, no wonder some stock have been annihilated
from the nyse site: "Under the proposed rule, hedge funds and other money managers with more than $ 100 million of securities investments would have to begin prompt, public reporting of their daily short positions. Big money managers currently report long positions to the SEC, but not their short positions."
Share Statistics Average Volume (3 month)3: 5,116,780 Average Volume (10 day)3: 4,779,680 Shares Outstanding5: 147.72M Float: 146.96M % Held by Insiders1: 0.36% % Held by Institutions1: 92.10% Shares Short (as of 26-Aug-08)3: 44.49M Short Ratio (as of 26-Aug-08)3: 13.4 Short % of Float (as of 26-Aug-08)3: 30.40% Shares Short (prior month)3: 43.91M
I think you're missing the point. Naked shorting means the shares are sold w/o finding shares to borrow against. In this way, naked shorting could allow selling more shares than even exist in the float, plus the short seller wouldn't be in a situation where they were forced to cover their shares when the legitimate owner decided they wanted to sell their shares. (This happened to me several times on shares I'd shorted over the years) The short interest ratio could reflect 100% legitimately borrowed shares in short sale