FACTBOX: How naked short selling happens - Reuters - Naked stock shorting
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Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow. Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any Naked short selling is a case of short selling without first arranging a borrow. If the stock is in short supply, finding shares to borrow can be difficult.