Naked Shorting

Naked shorting is the practice of selling a security that the seller does not own. This is done by borrowing the security from a broker and then selling it. The seller then hopes to buy the security back at a lower price and return it to the broker. If the price of the security rises, the seller will lose money. Naked shorting is a risky practice because it can lead to losses if the price of the security rises. It can also lead to market manipulation if it is done on a large scale.